Start-up team’s track record can secure investment, expert panel reveals

Start-up team’s track record can secure investment, expert panel reveals

Tuesday, October 21, 2014 Totally Gaming

Venture capitalists and investors often rely on the track record of an entrepreneur and his or her team when it comes to deciding on whether to provide financial backing for an iGaming start-up, EiG attendees were told today (Tuesday) at Arena Berlin.

In a session on ‘Deciding which trends and investments will bring real value to your business’, a panel of experts outlined the criteria used for deciding which iGaming projects receive their support.

Redeye corporate finance adviser Dawid Myslinski (pictured right) said that the “people behind the company are very important” when investing in a start-up.

“For us, they must be experienced and have proved themselves with other ventures,” he said.

“At an early stage it can be a gut feeling, and you would rather work with an entrepreneur who has had some past success.

“There isn’t any sure-fire way to know that a venture will be successful and most investors are risk averse.

“They will turn down at least nine out of every 10 offers, so if you are trying to attract investment, you should not be put off if you have several rejections at the beginning.”

Atlantic Internet venture partner Jens-Philipp Klein added: “We usually get involved at a very early stage, so the team behind the venture is very important.

“Is there the potential to do something much better than is already out there? We don’t tend to invest on the basis of key performance indicators as there is usually not a lot of data to look at.

“So the concept and the team behind the venture are crucial. The potential speed to market is also important as it can reduce risk.”

Akur Capital partner David Shapton (pictured left) outlined other factors in making an investment decision.

“We will always look at something that has the potential to be a game-changer when it comes to deciding on whether to invest,” he said. “However, it also depends on the stage of your development.

“Crowdfunding can seem more like a popularity contest, but you have to ask if those are the sorts of investors that you want.

“They won’t be particularly helpful further down the line or with an exit plan, but two or three smart and supportive investments will stand you in a better place.

“The exit is irrelevant for early-stage funding though, and sometimes entrepreneurs can try to run before they can walk.”

Klein added: “If an entrepreneur approaches us and talks about an exit strategy, it is usually a sign not to invest. They need to focus on building the company, which can take between seven and 10 years.”

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