Barefoot was packed on 31st January with folks from Sri Lankan startup ecosystem for another networking night at Spike!
Spike is Sri Lanka’s first monthly regular pitching and idea sharing meetup where Sri Lankan startup community get to meet in a casual surrounding for some great conversation.
There were two speakers and one of them was Arj Wignaraja.
Who is Arj Wignaraja?
Arj Wignaraja is an entrepreneur (CEO, MD of Remote Sensing Metrics) and an investor at Lankan Angel Network. He is an experienced entrepreneur and a mentor for startups. He touched on some of the critical concerns when it comes to startup investing. Following are his key messages to both future entrepreneurs and investors.
How to select the best investor for your startup
If you ask any potential startup entrepreneur what their biggest problem is, “lack of funding” comes first. This is even more crucial when it comes to tech startups. Most Sri Lankans abandon their ideas because of lack of funds. Arj managed to give some fantastic advice when selecting a potential investor.
Money is not everything
Yes, the money is important when selecting an investor; but personality of the investor is even more important. One of the mistakes a startup can do is, selecting an investor solely based on the amount he/she is willing to pay. This is where most startups go wrong. If they believe that they can just take the money and carry on with the work, they are wrong! Investors in most cases involve in the business process whether you like it or not (because it’s their money after all).
Relationship is everything
More than anything else, a good relationship with the investor will take a startup a long way. Their mentoring and guidance can help you to navigate through future challenges. When selecting an investor, find a person who you can comfortably work with. Find a person who will be beneficial beyond monetary perks.
There is no hard and fast rule for selecting a great investor for your startup. The best thing to do is get to know the person really well. Meet the person several times and see if she/he is likable. If you feel comfortable working with them, that’s a good sign.
How to find the right startup to invest
Investing on a startup is not like depositing money in your bank. It’s a high risky investment. But unlike any other investment opportunities out there, startup investing has great returns for investors.
Selecting a good startup to invest is also difficult. Startups come up with million dollar financial predictions in their pitch decks; but reality is far from it.
Startup investing is a long-term game
Startup investing is not short-term. For some startups, it takes around 4 to 6 years till you see some positive cash flow! So before you enter the game, know that it’s a long term investment. So the best bet is to find a startup that you’re comfortable to work for the long haul. If you are comfortable with them and if you can build a great relationship with the startup, that’s the green light.
A startup founder can be anybody
Some investors have a misconception that a founder should be confident, passionate, highly motivated, a great speaker and traits of a so called “leader.” But there can be great founders who don’t fit the above profile. There are successful Sri Lankan startup founders who are soft spoken with light handshakes. So don’t judge a founder based on the way they “look” because looks can be deceiving!
Get to know the founder more before you sign that check.
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Also don’t forget to be at next Spike.