Investment attraction is a natural stage in the startup development process when the developed idea requires financial injections that help turn into a mature and independent business. What are investors looking for when they try to identify promising startups and those ideas destined to become a business? And what should the startup founders, who wish to hear the fateful “yes” from the investor, pay attention to? Answers to these questions will be sought and success stories will be shared during the training and networking events at the Kaunastic Startup Week.
As Tadas Stankevičius, the director of Kaunas IN, which works closely with the startup community, notices, the attractiveness of a startup in the eyes of investors is probably determined by two aspects – the professionalism of the team and the good timing. Remembering the world’s most famous examples: Airbnb’s success was determined by good timing. When the 2008 crisis hit, people had less income, therefore, the thought of renting your apartment or a room for travelers to earn extra money, proved very appealing for a large part of the global population.
“It is believed that if this idea were proposed at another time, it would not be so effective. Now let’s link it to the team that knows what it’s doing, and we will have a world-famous startup, which can hardly even be called a startup today. The same is true for Lithuanian startups, which, with a professional team and niche-filling idea grow into businesses that help the growth of the entrepreneurial ecosystem. Why do I mention the ecosystem? Let’s remember the example of Ireland: there was a time when the most advanced technology companies moved to this country, setting up their representative offices there. After some time, those who worked there decided to create their own startups. This is how, a strong and extremely vibrant startup ecosystem was formed in Ireland, which is considered a successful example all over the world,” T. Stankevičius says.
Not only financial investments
Investors are looking not only for vehement enthusiasts, who are passionate about their idea but also for a team, which is capable of delegating tasks and having an expert in the field that the startup is entering. It is a very good sign if a startup can show investors the first sales of a product or service, thus proving the viability and necessity of their idea in the market. The size of the potential market, the ability to occupy that market by offering a more attractive alternative than the currently operating competitors. Lastly, the uniqueness and originality of the product offered, as well as that almost intangible X factor that sometimes develops between the startup and the investor. These are the moments that often determine the investor’s “yes”.
But no less important is another aspect. When an investor comes to the startup, they bring not only money but also their competencies. According to T. Stankevičius, this is often even more important than the investment itself, “Many startups are looking for precisely these types of investors who can share their knowledge and contacts and help to successfully modify the startup.”
Today, an important part of the economy
The organizers of Kaunastic Startups, who have been working closely with Kaunas startups for six years, notice that the city’s start-up ecosystem shows signs of maturation and the industries from which people with ideas come are very different, from the financial to the healthcare industry.
“From the perspective of recent years, it is obvious that the startup ecosystem of our city is no longer based on just a few ideas or a few people – it is maturing. The wise learn from the mistakes of others, thus, we are not only happy about the successful startups but also learn from those ideas that, at some stage, for one reason or another, collapsed. In Kaunas, we have people who are developing their second or third idea; who are actively joining the community, discussing, sharing valuable experiences, thus helping others in the ecosystem to grow,” T. Stankevičius says.
Roberta Rudokienė, the head of Startup Lithuania, notices that Lithuanian startups not only attract considerable foreign investment to the country but have already become an important part of the economy today. Last year they paid about 100 million euros in taxes to the state budget. They employ over 9 thousand people whose salaries are higher than the average of the IT sector.
“In an ever-changing world, innovation is becoming one of the key drivers of economic and societal development. It is the startups that are the market players most capable of adapting to rapidly changing conditions. They can change their business model if necessary, and to respond flexibly, and develop new solutions that best respond to market needs. They adopt the latest technologies in their business processes the fastest and by being able to react quickly and adapt to changes, are not only capable of growth but also to create more and more jobs, contribute to economic development and enable new technologies in the processes of other businesses,” the head of Startup Lithuania says.
Gintas Kimtys, the head of MITA, agrees with her saying that now startups are more important than ever and the agency is ready to provide all the necessary help and contribute to the breakthrough created by talents, “In the face of the pandemic, we are seeing a growing number of innovators offering non-traditional solutions based on the latest technologies. We are particularly pleased with the high level of activity in the health and biotechnology startups, as it is now more important than ever to join forces to tackle new challenges.”
Intensive Kaunas Startup Week will feature expert insights and training
Ilja Laurs, one of the most successful entrepreneurs of the new generation, will share more insights into what investors are looking for, how to attractively present startup ideas, and where to focus your energy and attention when preparing for investment attraction in his presentation Successful Startups: Investor’s Viewpoint. The presentation will take place remotely on Tuesday, November 10, from 4:30 p.m.
Startups are invited to gather ideas and listen to expert insights that would help with the development of their own ideas in the Kaunastic Startup Week event that will take place throughout the next week. The intensive training and networking week organized by Kaunastic Startups program on November 9-13 will allow the participants to gain experience from Lithuanian professionals. Live meetings, discussions, seminars, and experience sharing evenings will be waiting for you.
Read more about Kaunastic Startup Week here.