This is the 12th article in a continuing series chronicling the growth path of Screach, a startup based in Newcastle upon Tyne in England’s North East. Screach is an interactive digital media platform that allows users to create real-time, two-way interactive experiences between a smart device (through the Screach app) and any content, on any screen or just within the mobile device itself. We invite your feedback.
Investment. It’s big news in the startup world. Sites such as TechCrunch and The Next Web are full of stories about how much a company has raised and what it wants to do with it. But if you’re set on putting together a round for your business, you’ve got to think about more than just passing around the tin.
There are mountains of articles out there about what investors are looking for, and how to have those conversations, so have a look around and get an idea of how to go about it the right way.
Earlier this month, Screach announced it had raised $2.5 million in funding from Northstar Ventures, Hotspur Capital Partners and other strategic investors. It plans to use the money to accelerate the rollout of its in-venue entertainment system, ScreachTV, into bars, first in the U.K. and then beyond.
ScreachTV is a plug-and-play box which allows bar owners to put interactive and personalised content on their screens to entertain and draw in customers when there are no live sporting events. Using its existing TV screens, a bar can display pub adverts and offers, sell ad space to local businesses, show posts from Twitter, Facebook and Instagram relating to the pub or the local team, broadcast the latest news, entertainment and sport headlines, and even challenge customers to interactive games such as pub quizzes.
CEO Paul Rawlings says the investment is crucial to fulfilling the company’s ambition to become a “global entertainment network.”
“We want to scale,” he said. “It’s about getting out to venues as fast as possible, bringing in partners and making sure we can support them. We’re getting a lot of interest around the product and we want to be in a position where we can actually scale this business. We want to make sure the customer experience is second to none.
“It’s all execution now. We’re looking for partners in the U.S. and U.K., and we’re focused on really putting out a product that we’re proud of.”
Screach also raised a previous round of funding when it emerged from a startup accelerator in 2011. Here are Rawlings’ thoughts on how to boost your chances with investors:
Get investors to come to you
“If you approach an investor, you’re at a disadvantage,” he said “If they approach you, you’re laughing.”
However, not everyone is a can’t-miss company on every investor’s must-see list. So how do you attract attention?
“Press is a good thing,” Rawlings said. “If people are mentioning you, you’re more likely to get noticed by an investor. Building your network is also very important, so you need to get out there and meet people. But there’s also a lot to be said for getting out there and getting known for doing a good job.”
Build the relationship
A lot of startups dream of meeting someone who’s so impressed by their product that they write a blank cheque and slam it down on the table straight away. However, building the confidence that leads to investment can take a lot longer.
“The key to any funding round is you’ve got to start the conversations really early,” said Rawlings. “They’ll do their due diligence, but the investor also wants to be part of the journey. That journey might start six months before you take any money off them.”
It’s all about team
This isn’t the first time anyone’s mentioned this, but investors look for a solid management team as well as a solid idea.
“The startup needs a different mindset,” Rawlings said. “You don’t think traditionally and you’ve got to find the right people who think the right way. Our CFO, Tahir Ali, is fantastic with finance, but he’s not just about numbers. He understands the vision and the product, and can sell and do marketing. Richard Dodd joined us from BT Group as our COO, and is another fantastic addition. He brings a lot of structure and is really zoning the product.”
Keep it simple
You might think your startup can change the world in many different ways, but investors need to see you’re not going to be running around madly trying to do everything at once.
“Focus is a big thing. We’ve got a product that’s very versatile, and we’ve really had to learn to focus on key areas, pick low-hanging fruit and have a path to money.
“Our vision is create a global entertainment network, but in order to get there we’ve got to take it off in chunks. We know the market’s big enough to support what we want to do, but we’re focusing primarily on the U.K. for now and building from there.”
Know your numbers
Investors love potential. But they’re also interested in seeing what you’ve built so far, and how big your target market is. Having cold, hard facts and figures at your disposal can be the difference between an interesting concept and an exciting opportunity.
“Every business is run on metrics, so you have to know your numbers,” Rawlings said. “It’s important to quickly identify what your key metrics are. For us, it was the total number of paying venues we were operating in, and making sure that we had a clear path for how we’d lead a venue down that path.”
Don’t be afraid to think big … and be passionate
“A really big element is having the vision and having a dream,” Rawlings said. “A lot of companies don’t have global visions at their outset. It’s important to think big, but also to have a plan and to be able to execute.
“We’ve moved from being a platform for interactivity to being an entertainment network. ScreachTV is the embodiment of our platform, but it’s done in a way that allows us to take it everywhere. It’s a bigger vision and it allows us to realise what we want to go.
“When you’re trying to build something, you’ve got to be passionate about it. If you’re not passionate about your product, no one will be.”