Principal of Lough Shore Investments (@loughshore), Moore is a former entrepreneur who sold Wombat Financial Software for $200 million to NYSE Euronext in 2008. Now a venture capitalist in Northern Ireland, Moore’s goals are to “bring ten great companies to exit or IPO by 2025.”
Speaking at the very successful Angel Meetup (@AngelMeetup @XcellPartners) held recently in Dublin, he had five tips for entrepreneurs:
Manage the business
In other words, look after the basics. Sometimes called the “boring stuff,” it means managing the business and being careful with cash flow. Carried out successfully, this is likely to pique investors’ interest, Moore said. “If you don’t need the money, they’ll be knocking on your door.”
Proof of Traction
There are very few Instagrams that get bought for $1 billion less than 18 months after they launch. However, investors will look at growth patterns. The best buyout stories are those of companies with revenue acceleration, Moore said.
Be Honest & Transparent
Although entrepreneurs like to tell horror stories about venture capitalists, many VCs have been defrauded by start ups, Moore said. “There isn’t a serious investor who hasn’t been sold a pup, or a litter of pups,” he said. If investors feel information is incorrect or being withheld, they will not invest.
Realistic Growth Projections
Although a naturally optimistic bunch, entrepreneurs should not let their projections stray from reality. Deals can fall through at the eleventh hour if investors don’t believe projections.
Once the commitment is made, entrepreneurs and investors need to work in partnership, Moore said. Repeating the quote attributed to Einstein that compound interest is the “most powerful force in the universe,” Moore said investing and returns on investment require patience.
Image of Lough Neagh copyright Lough Shore Investments website.