NEWSROOM
Advice from a venture capitalist: “Remember that investors are human too.”
6 July 2023
Andrew Chen, University of Auckland Research Fellow at Koi Tū: The Centre for Informed Futures and Venture Partner at Matū Group, says stepping into the mind of investors can help founders increase the likelihood of developing a connection and securing funding.
Multiple factors are at play in an investor’s mind, Andrew advises, many of which are logical and analytical, such as risk mitigation, diversification and available funds. Others are more humanistic, such as the likeability of the founders and other social cues, such as who else has said yes or no to an investment opportunity. “Humans are social animals, and word of mouth is an important contributor to our thinking processes,” says Andrew. “Remember that investors are humans too.”
Seeking to understand the Investor’s mindset can help founders seeking capital. It may also help support the resilience mindset by realising that the reason for funding to be declined may be due to certain factors outside their control. According to Andrew ‘“You can deliver the same pitch to the same investor on two different days and get a very different response just because the investor is having a good or bad day. That’s not your fault as a founder.”
Researching, tweaking, pitching a lot, and building relationships are some of the keys to success, advises Andrew. “An investment is not just a transaction. It is a relationship.”
When it comes to the current state of the New Zealand economy, Andrew believes that although it is a tough time for both investors and founders, there is hope on the horizon for start-ups. “The really good start-ups are still getting funded, and there is more and more competition for those investment opportunities. There are some very good start-ups growing in Aotearoa NZ, which bodes well for the next cycle of economic growth as those start-ups get to leverage the market growth out of the current dip.”
During his time at University of Auckland, Andrew participated in the Velocity entrepreneurship development programme, delivered by the University of Auckland Business School’s Centre for Innovation and Entrepreneurship (CIE). He also credits his role on the Return on Science Digital Technologies Investment Committee as kicking off his venture capital journey. “I got to see what questions real investors ask and how they analyse investment opportunities, beyond the theory that I had learnt about in classes.”
Andrew’s advice for future founders is “Think, then do. There’s a lot of thinking and planning needed to run a company successfully, but you can also end up in analysis paralysis and never actually get things off the ground. The best way to learn how to be a founder is to be a founder, so start talking to people, make a few mistakes, and take opportunities to reflect on the journey along the way”.
Read more on the Matū website: Pitching in the shoes of the investor
Entries are now open for the Velocity $100k Challenge – enter your start-up plan for the chance of a share of a $100,000 prize pool. Applications close 28 July.
Andrew Chen, University of Auckland Research Fellow at Koi Tū: The Centre for Informed Futures and Venture Partner at Matū Group
Andrew Chen, University of Auckland Research Fellow at Koi Tū: The Centre for Informed Futures and Venture Partner at Matū Group
6 July 2023
Andrew Chen, University of Auckland Research Fellow at Koi Tū: The Centre for Informed Futures and Venture Partner at Matū Group, says stepping into the mind of investors can help founders increase the likelihood of developing a connection and securing funding.
Multiple factors are at play in an investor’s mind, Andrew advises, many of which are logical and analytical, such as risk mitigation, diversification and available funds. Others are more humanistic, such as the likeability of the founders and other social cues, such as who else has said yes or no to an investment opportunity. “Humans are social animals, and word of mouth is an important contributor to our thinking processes,” says Andrew. “Remember that investors are humans too.”
Seeking to understand the Investor’s mindset can help founders seeking capital. It may also help support the resilience mindset by realising that the reason for funding to be declined may be due to certain factors outside their control. According to Andrew ‘“You can deliver the same pitch to the same investor on two different days and get a very different response just because the investor is having a good or bad day. That’s not your fault as a founder.”
Researching, tweaking, pitching a lot, and building relationships are some of the keys to success, advises Andrew. “An investment is not just a transaction. It is a relationship.”
When it comes to the current state of the New Zealand economy, Andrew believes that although it is a tough time for both investors and founders, there is hope on the horizon for start-ups. “The really good start-ups are still getting funded, and there is more and more competition for those investment opportunities. There are some very good start-ups growing in Aotearoa NZ, which bodes well for the next cycle of economic growth as those start-ups get to leverage the market growth out of the current dip.”
During his time at University of Auckland, Andrew participated in the Velocity entrepreneurship development programme, delivered by the University of Auckland Business School’s Centre for Innovation and Entrepreneurship (CIE). He also credits his role on the Return on Science Digital Technologies Investment Committee as kicking off his venture capital journey. “I got to see what questions real investors ask and how they analyse investment opportunities, beyond the theory that I had learnt about in classes.”
Andrew’s advice for future founders is “Think, then do. There’s a lot of thinking and planning needed to run a company successfully, but you can also end up in analysis paralysis and never actually get things off the ground. The best way to learn how to be a founder is to be a founder, so start talking to people, make a few mistakes, and take opportunities to reflect on the journey along the way”.
Read more on the Matū website: Pitching in the shoes of the investor
Entries are now open for the Velocity $100k Challenge – enter your start-up plan for the chance of a share of a $100,000 prize pool. Applications close 28 July.
EMAIL
CIE@AUCKLAND.AC.NZ
POSTAL ADDRESS
THE UNIVERSITY OF AUCKLAND BUSINESS SCHOOL
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