Felix Haas is co-host of the Bits & Pretzels Festivals, investor and successful founder. At Munich Startup, he talks about the things he never wants to hear again as an investor and why feedback is one of the most important assets for startups.
#Commitment
“But that’s not the only thing I do.”
As an investor, I expect full commitment from my startups. Side projects and uncertainties are not issues an investor wants to be confronted with after investing a large sum of money in the company. A side job needed to stay afloat is understandable, of course, but difficult. We're here to solve these problems.
#Crew
"We are the best team of all.”
Yes, investors are looking for teams and personalities that convey the feeling of never giving up. They should have a deep understanding of their product/service and the market they are addressing, as well as a firm grasp of the target audience. Likewise, teams with little experience need to showcase their personal strengths to convince investors. It only becomes problematic when teams position themselves as absolute high-flyers. This is where the answer is no: presenting yourself as the best team of all is seen as naive, and investors don't like unrealistic founders. Confident, yes, but overconfidence, please, not.
#Research
“We have no competitors.”
Good tip: Do your homework. It's very, very unlikely that your product has no competition. If you don't find any, do your research. If a startup claims it has no competitors, it could mean either that there's no existing market or that lazy founders haven't done enough research. Neither of these bodes well for an investor. Speaking of research: if you do discover competition, compare yourself! Size, revenue, costs: the more information you can get, the easier it will be for you to assess yourself and your company, especially in the beginning.
#Timing
“We were the first.”
They say timing is everything. Being the first to launch a product has several advantages: there are no current competitors, you have pricing flexibility, and ideally, a reputational advantage. Unfortunately, there are equally significant disadvantages and risks that can affect your company. Corporations can copy your product and improve it, quickly overtaking your startup. Startups often have almost no control over this; they lack the capital, know-how, and contacts to keep up. As a pioneer, you also have extremely little information at your disposal. The uncertainty about future market developments, the effort required to convince customers without detailed needs, and the risk of technological leaps all pose extreme risks for pioneers.
#Forfree
“It’s all free.”
Free? Sounds pretty bad to an investor. Claiming that a service, product, or service is free doesn't exactly speak volumes about the startup's high return on investment. Even if the intention of raising money through advertising promises high returns, one must not forget that a considerable amount of capital is needed beforehand to attract customers to the platform.
#Feedback
“No, I don’t think so.”
Feedback is (besides funding) the best thing you can get after a pitch. It's not helpful to argue, be ungrateful, or dismissive. Of course, it's entirely possible that, as a "vision-driven" startup team, you're pursuing a goal that the rest of the world simply hasn't grasped yet. Nevertheless, feedback from customers and investors is the most valuable asset you can receive. We're not being mean; we're just pushing your company in the right direction for future success.
About the author
Felix Haas is co-host of the Bits & Pretzels Festival, founder of numerous successful startups, and business angel in over 80 European and international startups. He lived in Silicon Valley for over two years and enjoys spending his rare free time flying.
The perfect opportunity for networking between founders and investors is once again offered this year by the Bits & Pretzels Festival in September.
