There is an important, intangible presence within start-ups, an energy and enthusiasm that fosters new and exciting ideas. It creates a deep sense of engagement so that they can keep their edge within the market.
However, we all know that creating start-up business is never easy, and all too often companies lose their passion and spark as they grow. The wrong investment can mean substantial change, not just for their business, but for the investors as well.
At MOVE: Mobility reimaged Stefan Krause, Chairman and CEO of B-ON took to the stage to give us some great tips of what investors look for in businesses and how to play ‘the game of the start-up’.
Despite the challenges that we have faced in previous years, a record of 800,000 new businesses were created last year. There are 5.5 million small business enterprises in the UK that account for a huge amount of the UK’s business population. However, while most people could start a business, it’s how you make decisions and execute ideas that really put you in front of the race.
“When you create a start-up it’s like playing chess and poker at the same time. The chess part is that you make some decisions under certainty, you see the other move (that’s your competitors, that’s the market, that’s regulation) you just have to figure out how you are going to fit into it.
“You have to be a good player to win on a chess game and then it’s the decisions you make and a higher level of certainty because you saw the move and responded to the move. It doesn’t always mean that you make the right move which is fine,” said Stefan.
He continues to say, “When you fund a start-up, that’s when the poker starts. You don’t know what the moves are, you don’t know what hand is going to be given to you and when it comes to evaluation discussions you have to hold your cards very close to your chest. You need to have both skills.”
Investing within a start-up company can offer risk and reward. Founder, investor and sometimes even friends’ money can easily be lost with very little to show for it. In the initial phases of start-ups, Krause highlights the issues with investing in only a growth plan.
“We are an animal of hope, we are an animal of positive thinking…in 2020 there was suddenly, a fear of missing out. Suddenly, we had all these SPACS and evaluations that couldn’t go faster because someone had set a very high ceiling…,” said Krause
“The market is reverting to fundamentals. It’s not betting on huge growth plans, it just wants to see companies executing their business plans, selling, producing…my advice is to go back to the fundamentals, create a company, focus on the core, forget the dreams right now and build a good company with a good team that investors can see”
Start-up investment is imminent within the mobility industry, to see growth and change. The agenda for electrification needs to be moved along and arguably, the way to do this is to invest in new ideas, companies and business that will provide innovative solutions. But how can investors tell which solution is right?
“It’s how you present yourself. There are people that are passionate about something, and believe in something, and want to do good for the world. The other group is people that are just too focused on money…you can’t hide it when you present to investors. It becomes obvious very very quickly,” said Stefan
No matter what sort of business you are, we can all agree that within the mobility sector, a collective agreement is made that we need to create cleaner energy, push harder on sustainability and at MOVE we hope that we can provide change and spur the agenda towards a better future forward.