A common mistake most entrepreneurs make is misreading competitive advantage for a business plan. As any failed product / company’s review will quickly reveal, the primary reason for not making it was because of some else’s competitive edge that edged everyone else out eventually. For a start-up seeking to blow away and impress potential investors, a viable or sustainable business advantage or competitive edge is what shines through.
For start-ups, cash is always, well, expensive—and elusive. Early stage investors (HNIs, Angels, friends and family, Seed Funds) who are themselves usually investor-evangelists, need a demonstrated, tested and ‘battle-hardened’ concept before parting with funds. Therefore, start-ups and entrepreneurs need to go beyond their great ideas and get down to figuring out and eventually, walking the talk. A proof of concept (PoC) makes you aware of your challenges and the future road-map, thereby, raising the level of confidence of your potential investors in your business idea and team commitment.
For a start-up looking at funding, be it seed, angel or even equity-based, it is critical to be ready for investment. This is necessary because not only does this help the new business get going with a head-start but it is also necessary for the entrepreneur to see how far his idea can convert to reality in the real practical sense. To get investors interested and ‘locked-in’, deliberating your investor-readiness quotient does make eminent sense.
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