Investors like problem solvers
MELBOURNE Angel investor Maurice Grasso says the growing trend towards entrepreneurialism is not being matched by an increase in the number of start-up founders with the capacity to take a venture the full journey.
A panellist at the Going Global for Business discussion at Runway Geelong, the Angel investor of eight years standing had some sobering advice for founders of business start-ups who, he said, were often misguided about the role of venture capital.
“There is a lot of wannapreneurs, because it’s sexy and they can say, ‘I’m doing a start-up’,” Mr Grasso said.
“But never in a million years do they have the skill set to take it through to completion.”
Statistics showed venture capitalists were investing more heavily, but in fewer deals, he said.
Investors only back people they think can take the full journey, and that includes having an exit strategy.
“At the end of the day, it’s a donation until there’s an exit,” Mr Grasso said. “We have a separate pocket for donations.”
He said start-ups were more likely to attract investors if they had a solution to a significant problem, a better grip on their market opportunity, a fully developed business plan and a global outlook.
“You have to ask: ‘Am I setting up this business to exit, or setting up a lifestyle business that is going to pay me a wage and I am going to be happy doing it in 20 years’ time,’ ” he said.
“That’s two completely different types of investors.”
Hosted by Brandon Burns, the Going Global for Business discussion was presented by ACASE, a not-for-profit organisation encouraging collaborations between scientific innovators and industry in Australia and Asia.