How Can A Tech Startup Go About Securing The Support It Needs?

By Salvatore Minetti, CEO, Fountech.Ventures

Launching and growing a startup to success can be a challenging task. This is compounded by the fact that, when embarking on a new business venture, founders will often focus all of their best efforts into building an innovative solution to a common problem.

By overlooking the hardest stage – namely, building out the commercial side by winning customers and scaling operations – many will struggle to translate their brilliant ideas into legitimate solutions with global market potential.  

Indeed, bridging the gap between a great concept and commercial success can be difficult, even for the most pioneering entrepreneurs. That is why, in order to bring ideas to fruition, a deft combination of business nous, strategic investment, mentorship and technical and commercial expertise is required.

At first glance, it might look like there are plenty of options available to company founders who are on the lookout for external investment and mentorship. 

Generally, there are three main routes to consider: incubators, accelerators and VCs. While each of these different paths might be useful to some entrepreneurs, it is important to acknowledge that each individual model has its own strengths and weaknesses. Founders would therefore do well to consider which option is best for their company, before making any hasty decisions in a bid to secure funding and support. 

Whether this is because the model in question only targets businesses in the more advanced stages, or only provides limited and generic mentorship, business leaders typically need much stronger guidance – particularly where the deep tech and artificial intelligence (AI) space is concerned.

So, with this in mind, many budding entrepreneurs might ask the question: how can tech startups secure the fundamental support and funding that they need to grow?

  1. Incubators and accelerators

On the surface, incubators might look to be the perfect solution to founders; designed to stand as a catch-all support model for burgeoning companies, they offer the workspace, mentorship, and in some cases, even the early stage investment to help startups along the path to success.

However, as such models generally only offer limited funding, in many cases this just won’t be enough to get a new business venture off the ground. Particularly for less experienced entrepreneurs who are yet to make vital connections with knowledgeable mentees, incubators and accelerators might not provide sufficient support, or adequate access to the in-house talent needed to add genuine tech value to a product. This can be a problem, because as a result, founders might find themselves spending the bulk of their time on the hassle of investor outreach, rather than on building out the business itself.

Similarly, accelerators share much of the same downsides and are more suited to businesses in their scaling phase. So ultimately, this model won’t be right for all businesses either, as without all-important seed funding, many new ventures won’t be able to progress to this more advanced stage.

All in all, these are lighter-touch models that might be better suited to more experienced founders and well-connected entrepreneurs needing only surface-level support; but budding CEOs might prefer something more substantive.

  1. Venture Capital (VC) funding and angel investors

One of the main boons to VC and angel funding is that investors are often well-connected in the business community and able to offer robust financial backing to entrepreneurs, providing young businesses with the valuable guidance and consultation that they need to thrive. Additionally, they will also be able to support founders with a variety of different business decisions, including producing a workable business plan, or assisting with financial management, meaning that that they can offer fresh-faced entrepreneurs with fruitful opportunities for development.

However, although they might sell themselves as early stage investors, typical VC investment comes after the initial seed-funding round. For companies who are still in the very early phases of their project, they might not be the most suitable. Often, with so much cash at stake, the level of perceived risk is just too high for investors to take a chance on new ideas.

  1. Looking to investment that offers 360 support

With the above in mind, securing adequate investment (in terms of both finance and counsel) might sound like an impossible task for companies who are still in the initial phases of their project. Thankfully, there are still options to explore, and founders just need to know where to look for more hands-on investment.

For such companies, it would be advisable to seek out programmes and initiatives that offer support more holistically; packages that bring together all of the above elements and more, and bear in mind the typical drawbacks of more traditional routes.

Industry leaders and investors alike would also do well to think hard about how and to whom they are offering their guidance. Although the success of a venture might seem uncertain, investors shouldn’t be too quick to discount startups in the ideation phase if they believe in the vision of the project, and should always seek to contribute more than just cash. With investment comes great responsibility, and with so much influence on the realization of innovative projects, it is important that they have the startup’s best interests at heart.

Ultimately, it is of great importance that entrepreneurs with truly ground-breaking ideas receive careful mentorship from industry experts. Whatever model entrepreneurs settle on, we must remember that it takes more than just funding to build a business from scratch. Investors of all kinds therefore should focus their energy on offering their expertise wherever it is required to genuinely help disruptive tech businesses flourish. 

Salvatore Minetti is the CEO of Fountech.Ventures, which acts as venture builder and investor for deep tech and AI startups. With a presence in Austin, Texas, US, and London, UK, the company supports startups through the stages of ideation, development, commercialisation and funding.

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