Anyone who has tried to raise capital for their company through investors has known the feeling of looking out into the audience, or across the table and thinking "he/she is never going to invest in my company". Not just because it doesn't fit the profile, the numbers are wrong or some other reason, but simply because they are not an investor.
If the small investors on the Oslo Stock Exchange had the same requirements there as when listening to a start-up pitch, they would have avoided losing all their money on, for example, Norwegian. Because it is small investors who represent the majority of "angel investors".
Everyone wants to find the unicorn. But firstly, very few people get to meet a unicorn at all and secondly, my experience is that even if they did meet one, they either don't have the ability to see it or the ability to actually invest.
I believe that if you aim to get rich, investments in startups should not represent more than 5% of your total portfolio. Maybe even less.
But doesn't this exclude a lot of people, maybe even the vast majority?
Yes, it does, but only for those who aim to get rich from their investment. I believe that normal people, like myself, can also invest in start-up companies. But it can't be because I want to build a fortune to buy a boat or a cabin in 5 years' time.
It has to be because I want to contribute, because I really believe in the team, because I can relate to the problem or because I really believe in the solution. You might make money from the investment, but I don't think that can be the main motivation.
Too many people turn up at events and adorn themselves with the title of investor. They sit down and find 6,000 mistakes based on a 10-minute pitch. They complain that there is too little talk about the bottom line, too little focus on sales and exit opportunities.
There is only one person in Norway who should be allowed to sit and take notes like this and that is Trond Riiber Knutsen.
He invests often enough to be able to tell companies apart by key figures. But the rest of us who invest once in a blue moon should sit and watch the people, listen to the problem and try to understand the solution.
Every hiring manager wants a fresh graduate with 120 years of experience and low salary requirements. But if your company is located far outside one of the big cities, you have to make certain adjustments to your requirements. So do all those who call themselves startup investors, but who are not actually startup investors, but rather people who once or twice might invest in a startup.
So, next time you're going to a startup event and someone is pitching their company, I want you to think about it. Do you have the investment frequency to focus on key metrics, or should you rather invest in a team, a problem or a solution?