You know the old saying, “If at first you don’t succeed, try, try, try again?” Well, it’s pretty fitting for the Innovation Fund’s application process. On average, it takes entrepreneurs two to three attempts before they win funding. Surprised? I’m not.
The entrepreneurs who apply to the Innovation Fund are generally first-time entrepreneurs. They have little to no experience in starting, running or growing businesses. All this inexperience means they probably don’t know how to pitch their idea in a way that makes sense to and attracts investors. Most entrepreneurs can describe their products really well. But those same entrepreneurs have never been asked to present the businesses value proposition—the piece most important to investors.
So, most entrepreneurs come through the process with an imperfect business pitch. But that’s not all. I’ve also learned that entrepreneurs aren’t typically experienced accountants on the side. Given this reality, they often times struggle to put together financial forecasts that include all their real potential costs. And for an investor, the cost to market needs to be as well predicted and accurate as possible from the get-go.
Another big piece of the business value proposition many of the entrepreneurs overlook or under develop the first time around is their market. Most entrepreneurs who come to us have never really studied their market. They haven’t done the research to back up the claim of how big it is. And having data to show market size is a pretty big deal to investors.
All these traits of first-time entrepreneurs might make later stage investors squirm, but at the Innovation Fund, we love this. That’s because our mission is not just economic development but education. We look at coaching and teaching first-time entrepreneurs as core to what we do.
The team working at the Innovation Fund has the experience and expertise these entrepreneurs lack; there is literally decades of real business experience walking entrepreneurs through the Innovation Fund process. They wake enthused about helping entrepreneurs and sharing best practices that will help these innovators get their ideas funded and a little bit closer to market.
While these mentors might not be able to help every entrepreneur get his or her pitch and business model polished enough to win funding the first time around, the entrepreneur learned every step of the way. Then they can take all that feedback, further hone their business pitch, and try again.
And experience has shown us that those who have initially failed, but listened and learned from the feedback, have been some of the Innovation Fund's most successful companies.