Among the unicorns – startup companies worth more than $1 billion – only 15% have gone through some kind of acceleration programme (source: Ali Tamaseb: Super Founder). Could it be inferred from this that 85% of unicorns have achieved success without the support of outside consultants? Certainly not. According to a study based on data from Ali Tamaseb, the majority of unicorn founders are serial entrepreneurs. In other words, they have already made mistakes in their previous attempts, learned from them and are now doing things smarter.
The dilemma of the early stage startup
Many early-stage startup companies often have a common problem: They would want from the very beginning to obtain significant external venture capital to develop the product or service as well as invest in sales and marketing. Venture capitalists, on the other hand, think that an eligible startup should have a founding team of at least two people, a limited company established, MVP (minimum viable product) ready or nearing completion and preferably evidence of already paying customers. This applies for both private and public funders.
Utilising the experience of the coach
How can the above eligibility be achieved then? The short answer to that is with hard work. The slightly longer answer is that the business idea must be good enough, a good team needs to be built and the MVP needs to move towards a product-market fit by listening to the customers. Do you have to know everything yourself? Usually yes but you can call a buddy. By buddy, I mean different advisers and coaches. Some angel investors are also happy to advise the startup company as well as offer their experience and network to the startup. Similarly, board members and individual advisers should be utilised. There are also both generic and industry-specific startup incubators and accelerators in the Helsinki Metropolitan Area startup ecosystem. Some of them are programme-focused and some are focused on personal coaching.
How can a coach help you move forward?
You cannot pour information on a startup founder’s head. In collaboration between the founder and the startup coach, you must first find out where you are going and what the founder needs support for. Founder’s first answer is often that a startup needs support to get funding. That is a fact, but behind it lies a number of the above-mentioned steps which are required to be eligible for funding. At the very beginning of a startup, they are all about:
- promoting an MVP product/service to a level where the startup can get the first paying customers
- strengthening the team to at least two people and key areas for early-stage business
- planning and launching of the sales and marketing in the first market
When sufficient progress is made in the above areas, eligibility for funding will arise. Applications for public funding will be approved and private investors – both business angels and Venture Capital – will be interested in the startup. What matters is the direction and constant doing. Based on the feedback from funders, if there is not enough progress yet, then after the analysis, work will continue either in the same direction as before or after pivoting in a new direction.
The coach may not be very popular at the point where the above-mentioned startup’s eligibility for funding logic needs to be described. However, those teams that are “coachable” – in other words, know how to take advice – are moving in the right direction and will often move forward sooner or later. Some founders choose to wait for the lottery jackpot – that is to continue to apply for funding through the Investor Deck or business plan alone, but do not set out to make the necessary progress mentioned above. And, like in the lottery, they also succeed sometimes.
