Looking for investment to develop your start-up? Tap into the expertise of our network

Posted on: 23/11/2020
piles of coins with leaves growing from them

Whether or not your start-up idea is in cyber security, our CyberASAP mentors have some valuable advice.

Over the last four years, the Cyber Security Academic Startup Accelerator Programme (CyberASAP) has helped dozens of academic teams to commercialise their ideas. How? By providing them with the kind of knowledge, expertise and practical help that start-ups need to take a product to market.

No matter how brilliant an idea, any start-up’s commercial progress relies on attracting investment. And that means developing not just the right Proof of Concept; but also knowing what investors are looking for – and tailoring an effective approach accordingly. This is the kind of crucial advice we give CyberASAP teams as a core part of the programme. As a result, they have been successful in raising £6million in further funding since “graduating”.

Led by KTN programme Directors, Emma Fadlon and Robin Kennedy, CyberASAP takes teams through all the vital stages in the start-up journey, drawing on the valuable input of a wider network of highly experienced practitioners/mentors.

Here we distill some of the advice provided by some of them, specifically on approaching investors. First up Rockman Law, Venture Scout for Ada Ventures:

“The preparation before meeting an investor is just as important as actually meeting the investor. Founders should take the time and run a proper process, similar to a sales funnel. This means identifying if the investor actually invests in your market, your geography and at your stage; next put them in your CRM (whether it’s Airtable, Hubspot or Trello) and then track them as they move down the funnel. Try to find out if they have made any investments in the last 6 months as they may have already depleted their dry powder, and only have funding available to make follow-on investments. Also make sure that the investor doesn’t have a competing investment in its portfolio.

You will meet a lot of investors when fundraising and it’s impossible to get funding from all of them, so get the most out of every meeting and treat them as learning opportunities. It’s their job to speak to founders hence they have accumulated a lot of knowledge about how others have built their companies. Ask them how they think about your market, how they would grow your company, what metrics you should track, how they would get the first customer.”

Dr. Tristram Riley-Smith, Director of Research, Department of Politics & International Studies, University of Cambridge has further illuminating advice:

  • Build a shared understanding of the target
  • Illuminate the market (defined as unresolved pain or unfulfilled appetite);
  • Champion your solution (described in terms of defensible Intellectual Property and diversified team);
  • Show you care about a return on investment (containing costs, generating revenues, achieving an exit).
  • A different “pitch”
  • Inspire with a vision of a future transformed by your solution; but be realistic, especially in terms of commercial focus;
  • Communicate with clarity, brevity, optimism and confidence: don’t be afraid to favour pictures and graphs over text;
  • Use (and understand) business acronyms and jargon: B2B/B2C/B2G; IP Protection; TRL; MVP; Recurring Revenue; EBITDA.
  • Lose the Tin Ears
  • Listen carefully to potential customers and investors;
  • one investor will be different from another, requiring different inputs;
  • one customer will be different from another, expressing different needs;
  • Adapt your messages accordingly, without losing integrity or focus.

Jake Holloway, Chief Product Officer at Crossword Cybersecurity plc, highlights the need to focus on what investors want to know – not on what you might want to tell them!

“Start-ups from Academic backgrounds need to understand that Investors are not like Grant funding bodies.  They don’t care about your research, or how you have designed or built your products.  They want to invest the smallest amount possible needed to have significant control over your business, and get the biggest return with least risk.  So your pitch to them needs to talk about who is going to buy your product, and why.

“When talking about forecast revenues, don’t make the mistake of saying that the market for your product is £X and that you’re going to get a minimum Y% market share.  No experienced investor will believe those “top-down” figures.  Instead, create a list of specific companies and the decision-making roles within them that (1) definitely have the problem you solve and (2) are a reasonably well-qualified suspect for your product.  You can then forecast a modest conversion of those leads to paying customers over time – a “bottom-up” revenue forecast.  The investors will then see that you understand exactly who you will sell to, and what you intend to sell them.”

As this year’s cohort of 14 teams move towards the climax of the programme – a Demo Day in February 2021 where their Proof of Concepts will be showcased to an audience of investors and potential commercial collaborators – they will be building on the unique blend of “insider” knowledge and practical workshops that form such a valuable part of CyberASAP, the only pre-seed accelerator programme in this space.

If you are interested in participating in the Demo Day please provide your details here.

For more information about the programme visit the KTN’s CyberASAP page here.

CyberASAP is funded by the UK Government Department for Digital Culture Media and Sport and delivered by KTN in partnership with Innovate UK. This work is part of the government’s £1.9bn national cyber security strategy and supports the ambition to make the UK the safest place to live and work online.

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