The Industry Mentoring Session held by The Greater Hub last Friday (19/5) raised a topic entitled “Due Diligence and Term Sheet Hacks,” presented by Richie Wirjan, an Executive Vice President of Kejora Capital.
During the mentoring session, Richie Wirjan, who drew upon his work experience at Kejora Capital, highlighted a concerning trend where some startups are begging when approaching investors for funds. He emphasized the importance of shifting the focus towards demonstrating their product or service’s value and potential appeal to investors during pitching sessions.
Richie Wirjan said that some startups have even managed to get investment even though they are not in a state of urgent need for funds. Investors are interested and take the initiative to help grow the startup. This shows the importance of shifting perspective from a beggar mentality to creating a situation where investors are attracted and tries to chase startups.
“The mentality of begging is bad; we have to change the perspective,” said Richie Wirjan firmly, emphasizing the importance of changing the perspective in presenting startups to investors.
Next, Richie Wirjan shared several rules that must be applied for a startup to attract investors. One of the rules emphasized is the “rule of one.”
According to him, a startup doesn’t need to try to solve many things at once but must focus on one problem to be solved, one customer group, one right product, one feature that stands out, and one clear income stream. By following these rules, startups have taken a strong first step in attracting investors’ attention.
In addition, Richie Wirjan also shared some red flags that investors can see in a startup. First, the existence of co-founders who only work part-time shows that they are not willing to take full risks to support startup growth. It can also raise doubts in investors regarding the commitment and dedication of the co-founders to the project.
Furthermore, too many co-founders with unclear positions and duties are also a red flag. Richie Wirjan suggested that the co-founders not exceed five or just two people.
Moreover, investors may view hesitancy to take action as a negative indicator. Prolonged delays or unpreparedness to execute the proposed plan during pitching can raise doubts about the team’s capability to make timely and effective decisions.
