Boston’s leading VCs and angel investors share what they’re looking for when it comes to investing in companies.
Boston and it’s surrounding communities are a hotbed for entrepreneurship. As with any business owner, business funding is a hot topic.
This week, we co-hosted an event with Slate.com on what venture capitalists and angel investors look for when investing in companies. Will Oremus, who covers technology and business for Slate, served as the moderator. The panel of expert investors included: Andrew Parker of Spark Capital, Johannes Freuhauf of BioInnovation and the newly launched Lab Central for life sciences companies and Joe Caruso of the Bantam Group.
Before launching a business, entrepreneurs should take into consideration their business idea. Moderator Will Oremus encouraged attendees not to chase the trend just because it’s a trend. Panelist Joe Caruso pointed out that the world is a lot more than just media, social and mobile. Entrepreneurs should focus creating companies that have substance.
In order to create a company of substance, the panelists all agreed that they invest in start-ups that have a good team, the motivation to become successful, a solid vision and an idea that will have a lasting impact on users of the product or service.
Most investors take a chance on the people within a start-up because often a company prototype isn’t available. Panelist Caruso went on to say that for most entrepreneurs, the initial idea is almost always wrong. But you must have a team in place that can easily adapt to change.
After the investors shared their insight, attendees had an opportunity to ask questions. One question focused on company traction. VC Parker confirmed that companies don’t need traction in order to get investment. He’s invested in companies before without traction at the time of his investment. Caruso adding his thoughts by saying, “Company traction is the first step of failing in love for VCs. If entrepreneurs come across investors who say they need more traction, they haven’t fallen in love with the vision yet. Get potential investors to buy into the vision and their financial commitment will follow.”
The Hiscox team could feel the energy in the room of the Boston entrepreneurs. We encourage you to return to our blog over the next couple of weeks for video footage of the event and interviews from each panelist.
Finally, thanks to the team at the start-up accelerator MassChallenge for lending their space for the event!