This week I turn to another side of the startup world: Investors. They play a crucial role in getting new companies off the ground. I talked to Ricardo Jacinto, of Shilling Capital, to find out more about their work.
What’s the best way an investor can help a new company?
We believe investors are not only investment, we also see the role of investors as something very useful for a startup especially due to their experience in creating and developing businesses. When starting a business from scratch, it is normal to find difficulties and obstacles in every decision you need to make and their business experience and know-how can be quite helpful and guiding founders to make better decisions. Furthermore, you can also capitalize on their network, either for business development or for fundraising.
What are the three main traits you look for in a startup?
The three main features we tend to value in a startup are: (i) a complementary, persistent and ambitious team, (ii) real traction from the market and customers, (iii) and market size and huge potential on the specific vertical the startup works on.
Do founders need special traits as well?
Of course! When you invest in a startup, half of the investment is on the team so it is important for them to have the right skills. We acknowledge potential in teams that combine several characteristics we believe are crucial for success: full-time dedication to the project, persistence and hard-working, competence and diversity of backgrounds and knowledge, ability to adapt to market and business changes, and ambition to change and conquer the world.
Do founders make good CEOs?
In the stage we invest in, there is no doubt that the founders have to lead the project because they have all the incentives to develop and grow the business. Over the growth of the project, this tends to be even truer because founders should have all the information of the company, of the market and customers and the vision of how to implement the growth strategy. However, in many cases, there is also the need to hire advisors and market experts to help them in defining and implementing the strategy for the future.
This might be a tough question, but how do you know “how much” to invest?
Usually it is the other way around, which means that the founders ask investors the amount needed to fulfill a set of objectives they think are important. However, we always analyze the uses of the investment and question if that is the right amount for the defined objectives. We think it is important to guarantee sufficient cash until a next round or to achieve a situation where the business can fund the growth.
What was the main lesson from the BestTables exit?
BestTables exit is a great example of a Portuguese company dedicated to the development of something that was already established in other countries, but still was able to attract the interest of a company like TripAdvisor. Despite the competition, there is always a way to get to the market if that market is big enough and you are innovating.
How can startups based in Portugal compete with London, Berlin or Silicon Valley?
Although having so many great and unique features, unfortunately Portugal is a very small market and startups should focus on going abroad from the very beginning. Investors from abroad will be interested if there is real traction and growth to show. Portugal has so many great entrepreneurs, and is attracting even more interesting people. This, combined with the education and skills of the Portuguese people, allows our startups to compete with any company in the world. The most important thing is to focus on a problem and find an innovative way to disrupt it on the huge worldwide market!
To find out more about Shilling Capital visit http://www.shillingcapital.com