"Don't be afraid to have ideas and try. Feel free to do it on your own and in a small way. If you need an investor, look for one that fits the bill and brings experience and know-how in addition to money."
It's a dream come true. You got the investment you wanted from the investor. You gave him a good chunk of the company you've been building for years. The world and a bottle of champagne are opening up to you. You celebrate.
A few months later, you won't be surprised. You keep going to the same office. But you feel like you're going to a corporation you've always avoided like the devil. You don't even know how it happened.You fill out reports like a treadmill, you may even get promoted, but ... you have minimal real impact on the company. You're almost crying.
You just gave too much percentage at the beginning. And now it's too late to put it out.
In order for these things not to happen and for you to develop your idea into a truly driven and desired exit, you need to be careful and follow the right notes right from the start-up. Margareta Křížová came to the studio to introduce us to these. She is a business mentor who helps both sell companies and dig them out of the ground. It's her second time at Zážeh. This time we focused on start-ups, specifically on these questions ...
🔸 What are the first steps in starting a startup?
🔸 When to go to an investor and which one to look for?
🔸 What to present to the investor?
🔸 How much does the company have to offer the investor?
🔸 How do you verify that you sit down with an investor?
HOW TO FIND AN INVESTOR AND NOT LOSE YOUR OWN PANTS (INTERVIEW TRANSCRIPT)
Guest introduction
Martin Hurych
Hello. I'm Martin Hurych and this is another Ignition. If you like anything I've done, anything I've shot here, I'll ask you to subscribe, like or forward to a friend or buddy. By doing so, you'll help me get through the social media algorithms and you won't miss another episode. Today on the podcast is Margareta Cross, who you've seen and heard here before. Originally we were discussing that happy ending of the company life cycle where we talked about how to sell the company to an investor, today we're going to look at the very beginning. I hope to discuss very thoroughly what a startup has to do to get on this path. Margaret, hello.
Margareta Křížová
Hello, Martin.
What are the first steps in starting a startup?
Martin Hurych
Before I begin to interview you, it's probably fair to note that Margareta is an entrepreneur, investor, business mentor and boss, and the loudest voice of the NEWTON Business Accelerator. A model example that actually happened to me, a young kid calls in saying he has a great idea and he doesn't have the money. I'm sure you see a bunch of those today and every day, after all, you have tons of those in the accelerator or in the incubators. My ambition today is to explain to these guys and girls what can happen to them if they want to build a billion-dollar startup like Productboard and they are not from a big city. What I observe is that in big cities like Prague, Brno, Ostrava, the culture is already built and these people will say so. With distance from Prague, I think that education is decreasing and I would have an ambition today to make a cookbook that startups will refer to. So come tell me what should be my first step when I have an idea.
Margareta Křížová
When I have an idea, the first step should be some verification that the idea is real. I call it a business idea test. It's a very common thing to look at what the market looks like in my industry, to see what the competition is there, what the potential is there, what the customers are there, what their appetite to buy is, what their buying power is, but also to see who's already doing it and how they're doing it. That's not copying, that's inspiration, why reinvent the wheel. So I always say, when someone comes to me, who is their competition and not just in the Czech Republic, even abroad.
Martin Hurych
I'm gonna be the bad guy here today on purpose. Nobody's doing it, nobody's invented it yet, and Mom and Grandma say it's great.
Margareta Křížová
Forget it. If no one is doing it, you've either discovered a gold mine, or there's no money in it and it can't be done. Grandma and Mom are wonderful people, but never ask them if they would buy it because they will say yes.
What is a one-page business plan?
Martin Hurych
So what then, since I've already done my market research?
Margareta Křížová
I call it a one-page business plan. That's kind of what it is, so everybody understands what it is, who's going to buy it, who's going to get what out of it, why they're going to buy it, which way I'm going to go to market, what my sales strategy is, how much I'm going to sell for, and who I'm going to do it with. That's like 6 basic things. No need to write business plans. If somebody comes to me with a business plan that's 50 pages long and doesn't have a good executive summary in it, nobody's going to read it. You just take a big piece of paper, a marker and write down what, who, why somebody is going to buy it, how much, who I'm going to do it with and my go to market, go to market strategy.
When to go to an investor?
Martin Hurych
At this stage, many of these people already believe that an investor will help them. Does that mean that if I'm not clear about it, I shouldn't go to an investor at all?
Margareta Křížová
First of all, it's terribly important to say that no one is investing in the idea. Grandma and mommy can come in there, that's the 3 F's, family, friends and fools who have you I'd love to. Of course you need to put some of your own money into it and it's not about hundreds of thousands or millions, it can be your savings. But you need to be prepared for the fact that when you actually go to an investor, they will ask you about the skin in the game or how much you put into it. There, if you say you had 25k to start with, but that was your only savings and you put that in, that counts too.
But I definitely can't expect to have an idea, write a business plan and go looking for an investor. There you have to realize that the time and energy you spend looking for an investor, which is really a full-time job, is better spent at the beginning moving that business to the prototype stage. Then you can say you went to market, customers heard about it, or they didn't hear about it at all and nobody showed any interest.
Martin Hurych
So, at the moment, if I don't have an MVP, I don't have anything tested, I don't know if anyone is even buying it, there's no point in looking for an investor outside of that friend bubble. I'm a little surprised there that you went so far as to say that the moment I go to an investor, I should know how I'm going to get it to market. Because a lot of people are looking for a strategic investor who tells them they've got a couple of buyers out there, let's scale it, let's do the hockey stick, and they already want that from that investor. Isn't that how it works then?
Margareta Křížová
I think the question to expect, besides skin in the game, is how you're going to sell it. Because very often I have people come to me and say they have a great product or a great service, they invented it, they've got the tech and now they need to sell it and they're looking for someone to sell it. But if you have something and you can't sell it, you don't have a business. You just have something lying around.
Which investor to look for?
Martin Hurych
I'll allow that for my own bubble, because there are a bunch of engineers who are exactly on that side. Double underline that, he who doesn't sell, doesn't do business. So I sell, I do business, I can see that a hockey stick would be within reach if I had some spare cash and needed to bootstrap. So what kind of investor should I be looking for at this point? The bubble talks about a financial, strategic investor, angel investor. Let's get some clarity on that.
Margareta Křížová
At the beginning is the angel investor, which sometimes people confuse. I've heard that it's a charity, but an angel investor is an individual, a financial investor, who puts money in with the expectation of making a profit. I have to say that there are already a lot of individuals in the Czech Republic who are actually investing in the pre-seed or very early stage phase of the business. You have to convince that investor that you have a product or a service, that you've already tested it with a prototype or an MVP, that it's marketable, that people are really responding to it, but you don't have the capacity to break into that market and really start selling massively. Then you can ask for an investment to pay a salesperson or to pay someone to help with that sales. I probably wouldn't say I need money to do Instagram advertising, although if you have a product that's only sold on Instagram, why not.
The important thing to remember is that an angel investor is an individual who wants to be close to the business. It's good to remember that when I'm looking for an angel investor, I'm not just looking for money, I'm looking for smart money. So I would be looking for somebody who maybe has been in the business or who can help me with contacts, who can help me open doors. You need to be smart and just like an angel investor chooses the project, the founders of the startup should choose the angel smartly. Angel investors usually invest smaller amounts, there are angel investors who can invest 300k, half a million crowns, a million crowns, which no other financial investor will give you because that's low for them. Plus it's for a shorter period of time because they are investing their own money and it depends who it is, but it's usually for a shorter period of time.
Martin Hurych
What is a shorter time and how much will he want?
Margareta Křížová
The shorter term can be a year, not always, and I probably wouldn't even subscribe to the fact that you have to pay me back in a year with a 30% return. What is a 30% return, the return is what the market determines. If the angel wants to exit, then either exit when the industry is doing well and it will be fine, but putting that in the contract, I wouldn't sign that as a founder. So the shorter term is one to three years.
Martin Hurych
If it was a 30% return in terms of repayment with interest, it would be more of a loan than an investment. Is that right?
Margareta Křížová
That investment can sometimes be in the form of a convertible loan, which is a loan that may or may not convert into equity, into a stake in the startup. There are different triggers set up where that flip can happen. The truth is that it's not a bad form because you have a chance to get to know each other, you have a chance to figure out how it works, although personally I would figure that out before you invest. It sucks to have an investor who gets on your nerves, but the convertible loan thing is pretty common, so don't be surprised by it.
Martin Hurych
Aside from the fact that I'm not doing well, I need to pay it off, what are the other triggers, so when could I theoretically go for it or where, conversely, should the red light be on?
Margareta Křížová
I was thinking more of the positive triggers, because the loan is normally set up for some repayments, some interest. But if I personally had an investor who invested in me in the form
convertible loans, so I would ask if he would be willing to invest in the next round or if he needs to. I'd ask what I need to meet in order to flip on that equita. It could be the number of customers, it could be an increase in sales, it's positive things that happen in that business.
What are the stages of investing?
Martin Hurych
You have already mentioned here that investments can take place in several rounds. It is also relatively chaotic unless I am in Prague or Brno and in the right bubbles. Let us list them and tell us what we are talking about.
Margareta Křížová
We're talking about pre-seed and early stage, it kind of blends together and there's either the angel or there can be funds. By the way, even at NEWTON there is a pre-seed fund that is really willing to invest maybe half a million crowns, which is quite rare on the market, and that's really when you have an established product or service and you know where and to whom to sell. That's where this pre-seed investment can come in.
I would be very careful how much percentage I hand over at this stage. It could be somewhere around 10, 25% max. On the other hand, sometimes people overestimate the valuation of the startup, so you have to be a little bit down to earth there as well.
Then we get into venture capital, which is basically the Series B, Series C, which are the next rounds, and it's always very important to keep an eye on the contract as to who is going to dilute when the next investor comes in. I've also seen angel investors that have big law firms behind them that use contracts from big deals and there you really need to read between the lines and read that contract with someone who knows which beats. Because it can happen that when you're the founders and another investor comes in besides the first one, you're the only one diluting, but the investor isn't, and you always need to make sure that you keep that stake so that it's still okay to do the business. Because having 10% of the company and remembering what a nice company I had is not motivating. You become an employee of your own company, and that's highly demotivating. On the other hand, the truth is that a smart investor won't do that because a smart investor wants you to be motivated because he's going to make a profit.
What are the investment rules?
Martin Hurych
Seed, pre-seed, series A, B, C, it all seems like when I run out of money in the piggy bank I go to the market and ask for more. Is there a rule to this, or is it really that I run out of money so I go for more?
Margareta Křížová
It definitely has rules and it's good to have a vision right at the beginning of where I want to be in 2 years, 3 years, 5 years and plan accordingly when I need to start raising money. What's terribly important, I've said this before, fundraising or fundraising for investors is a full time job. I can't be the sole founder of that company, doing everything there and raising investors on the side. I've seen it, it ends badly because you're either looking for an investor or you're doing business. So you need to build into your plan who's going to do the business for you when you go out to raise money. That's terribly important and people often don't realize that.
Martin Hurych
Does that mean that for startups, the number of founders should be an odd number and 3 is too many?
Margareta Křížová
Like what. I would be contradicting myself a bit here, because after all my many years of experience, I would not go into business with anyone else, but I also don't go looking for an investor for myself. But it's really important to know when and what I need money for and to realize that it will take me at least six months to get that money. Someone might get lucky and it will be sooner.
Where to look for an angel investor?
Martin Hurych
Going back to the very beginning to the angel investor, we said it's an individual in most cases, except for the accelerator at NEWTON University, who pays some money. Very but I probably won't because I have beautiful blue eyes. So how do I present myself to him so that it has a chance of success?
Margareta Křížová
First you need to know where to look for it. If you're a startup founder, you should be around the startup community, which is how you find out that there are accelerators, that there are demo days, that there are events that take place in different coworking and innovation centers. You should be everywhere because that's where the angel investors are. It's kind of informal, but it's the best way to get to know these people and to network. Of course, another option is a recommendation that you know a fellow startup that already has an investor and maybe they'll introduce you. It's always easier not to go the completely cold route. I would definitely read economic newspapers, economic magazines, where they tell you who invested in what, why and sometimes you can find out how much. I would also set up Google Alerts with keywords like investment, startup, and so on, because I have to say that I have that set up and sometimes I'm surprised who's investing, what company has invested in what startup. It's surprising, but that's exactly the kind of information you need to have.
Martin Hurych
Especially in Covid and post-Covid, almost every lawyer had some investment, every dentist had some investment, and these people very likely were never in these bubbles in the first place. There's a much bigger gray market. Is there any point in cold calling these people or is it really better to crawl into these bubbles? Because what we're really saying is that I very likely have to go to this Prague and this Brno and do the networking there and that if I'm somewhere in the area, I don't have that chance.
Margareta Křížová
There are some people you will never know that they invested because they wanted to. If there is surprising information somewhere that so-and-so from Vysoké Mýto invested in something, there is a reason.So-and-so wants it to be known and possibly for people to be able to reach him. So I think that there is a need to be in that community. It is mainly Prague, Brno, Ostrava, but on the other hand, if you are in Vysoké Mýto, you can go to Hradec Králové, for example. Hradec Králové is quite active in startups. It's everywhere there's a university. Nowadays, basically no university can afford not to have an accelerator. There is a super Business Cauldron in Pilsen, so there is a lot to choose from, but you don't know without getting into that bubble or that community.
What to present to the investor?
Martin Hurych
So if you are from Pilsen, move to the Business boiler. I have an investor, I'm going to the first meeting. What then?
Margareta Křížová
I'm nervous, which is good to say is perfectly normal, and to realize that if the investor were in your shoes, he would be nervous too. People often ask if they should email that much-myth-ridden pitch deck or present it in person. I would never send it by email, but you can send a one-pager that tells the investor you'd like to meet. From there I would take the pitch deck, which is nothing more than a presentation where you have briefly stated again the 6 points I talked about. You need to not overwhelm and have answers ready for the intrusive questions, the so-called grilling of the investor. I have already mentioned one of those, how much you put into it. Then it's also good to know what would h a p p e n if people took your company or your product by storm. Do you have the capacity for that? I was on an investment committee and there was an amazing guy on there, he had a great product, it was pet food and we asked him what would happen if it really worked out. He said it would be a mess. So that's a good question to prepare for. Because people prepare for what if it doesn't work, but it might actually work. I always tell people to admit that they are nervous, because there is n o t h i n g worse than covering up nervousness with arrogance. If you believe in your project, if you have an MVP, if you have a proven track record that people would want it, but now you need to get into that market, then you have some value, you have something to say. That investor wouldn't have met you if they thought it was complete bullshit.
How long can I get by with my first investment?
Martin Hurych
So here I get 300,000, half a million, a million. How long can I make do with that?
Margareta Křížová
This is called burn rate, or how fast I burn it. It would be a good idea to do the math before you make the investment. We're back to the vision of what I need it for, how long I can get by with it, what it will do in the business, and when I'll need more money. That's where I would ask the investor if they're willing to invest more money or if I'm going to have to go out and graduate again and get more money. That's a very important question.
Martin Hurych
How long will it last?
Margareta Křížová
It depends on what you want to get for it. You have to agree with the investor that you need a million and for that you need to hire two people, one for sales to comb the market and one for marketing to prepare all the marketing documents and be the marketing strategist. The salary of the first one will be 50k plus 20% commission, the salary of the second one will be 45k. Let's call it 100k a month x 1.3 if they're employees and we're a year in. The investor will ask what do you expect these people to deliver in terms of results. You say you have 5 customers and you expect that in that year you should have 150 customers that will bring in sales of some amount.
Where to look for investors in the next round?
Martin Hurych
So there is not a certain time, but realistically we are talking about some first business time and the other side has to believe it. If we move on, I have the money, I hired the virtual mall according to our business time, the marketeer, they started to do well, however, the investor for whatever reason does not want to move on. So I'm going back to the market looking for more money. What's next for me? Because then it's very I'm probably not going for a million, I'm very likely going out of rank individuals. What should I prepare for then?
Margareta Křížová
You're probably going for venture capital, so you're already starting to reach out to really venture capital funds, which again, there are plenty of them on the market here. But you need to have a more established business case, you need to have a financial plan. On the other hand, you need to pick your first investor well because if you have someone who has a good name in the financial community, that's going to open those doors. That reputation of your angel can help you open the door to that venture capital. You're facing the normal process of having to convince them to get a meeting. In that meeting, get ready for the grilling, what's the financial plan, what's the outlook, what's the potential, how do we get out of this, what's the exit opportunity. No fund invests to be parked there indefinitely.
If you convince them and the investment committee gives the green light, you get a term sheet. These are the notes on what the investment will look like, how much money they will give you, in what tranches, in what parts, whether in one go or in parts, what you can invest in, how the company will be managed. The financial investor, which venture capital is, is all about financial reporting, it's numbers people. Get ready to have to have actual financial statements, you're going to have to track cash flow, you're going to be financially reporting. That term sheet is negotiable and I would say it's really important at this point to have someone on hand to help you with that. Because venture capital does it every day, venture capital and the people at that fund negotiate deals every day. The founder, the founder of the startup is sitting on the other side, maybe the angel investor is sitting there with them, if it's somebody who's dedicated to it, it might be them, but the venture capital is a little bit outnumbered. On the other hand, if they don't like it, they're not sitting at the table with you and negotiating. So it's not like you have to sit there meekly and say, great, where do I sign. On the contrary, you need to be very careful, look at what's going to happen if it doesn't go well, if there are any financial metrics set up, that have to be met, what if they're not met, are there any penalties. What if another investor comes in, who will dilute? What if a fund comes in and says they have a great buyer for the whole business and you have to sell it to them? That's a drag-along. Conversely, we have a great buyer and I want to sell too, that's a tag-along. There's a liquidation preference, what if the business sells, what's the order, who gets the money from that sale first? Also, if you don't watch it, you might not get anything. There are simply things you need to understand 1000%, and that's the basis of the term sheet. You need to negotiate, don't be afraid, ask, I'd rather look like a total ignoramus, but ask.
Martin Hurych
Now, I'm going to be very unpopular, but what I see is a higher maiden that many mid-sized companies are not prepared for, financial reporting, negotiations, a bunch of conditioning in future contracts. That's not going to happen to any entrepreneur in his 60 years of practice. How do these young guys stand it?
Margareta Křížová
They come to you or to me and to other people who have seen and negotiated such documents.
What does a pitchdeck for a VC fund contain?
Martin Hurych
How much more detailed will the negotiations be with the VC versus the angel? What do I need to have extra versus that pitch deck of like 8, 12 slides?
Margareta Křížová
You have to have a pitch deck anyway, but you're certainly not going to negotiate a super sophisticated contract with an angel, not to diminish the knowledge of angel investors, but it's somewhere in between. I definitely wouldn't go the route of pour money in and then somehow make a deal. I would keep an eye on what happens when someone else comes in, when they want to exit, and generally the expectations of what the angel wants. Angel investors are usually businessmen who have maybe sold their business or are senior executives of large companies who have free cash. Their expectations can be vastly different than the people in the startup and sometimes they're a little bit blinded by the corporate in that if the corporate works, it's all good, but it's a little bit different in the startup. So it's easier, it's more informal, but I still wouldn't do it completely just high-five and go for it.
Martin Hurych
I assume that since venture capital is involved, the next rounds are about the same in terms of difficulty. Is that right?
Margareta Křížová
They are equal in difficulty. I would say that the first venture capital will probably be from the Czech Republic, the next venture capital investor may be a fund that is regional, that has investments spread across the European Union. I've also seen investors who have come from the UK or even America, of course it's a bit more challenging there, but on the other hand you're hardly going to have an angel investor who is regional. The angel wants to be there, that's where the distance is important.
How do you verify that you sit down with an investor?
Martin Hurych
You pay a lot of attention to the interpersonal, to the chemistry that exists between us. I can imagine with this angel, either we know each other because we're from Vysoké Mýto or we'll have a few coffees and somehow I'll guess or not guess. You amused me when you wrote in your prep that a two page contract gets 4 pages of responses, of course that gives me some idea. But how do you choose the right venture capital type institution? How not to make a mistake there? I mean, I can just have a classy guy up against me and the big dragons come in the final. How do you vet them?
Margareta Křížová
Generally, startup founders consider getting money from an investor as the absolute top, which can be exchanged for many compromises. I think that's dangerous and although it sounds very soft, not sitting down humanly can kill the deal. Hence why people are afraid to speak up. But you have to not confuse that with arrogance, I've seen startups that are so cocky it makes you cry. I don't mean that, but asking who will be on the board, I want to see them physically. I want to see Karl, I want to talk to him, I want to have coffee with him and I want to talk to him about how we're going to do this business. I'm going to check out what the fund has already invested in, I'm going to go and ask those businesses how they're doing, what they're like, if they're shouting at them, if they're arrogant or if they're fine. On the other hand, I probably wouldn't want to have an investor who's going to be terribly nice. It's important to have someone nipping at your heels so you feel the pressure, but don't confuse wanting business results with arrogance. There are venture capital funds out there that I wouldn't take a penny from because they're a bunch of pompous guys. It suits some people, it doesn't suit me, everyone has to figure out what suits them. It's about people.
How much do companies offer to a VC fund?
Martin Hurych
Karl and I had all the coffee, saw some of my peers, invested startups, everything looks great. How much should I give these dragons? I'm already without a quarter of the company, I'm out of handouts, and I still have the prospect of wanting to live somewhere in Florida when I get my way.
Margareta Křížová
Of course, there are funds that want a strong minority, but with strong rights that can often extend to a majority, this can be contractually set up. There are funds that want a majority, but I think when you talk to a good fund, they still want to make it interesting for you. It may be that it's also set up contractually that the investor can get more over time. Again, it depends on what you want, if you want to exit, if you're building the business to exit and move to Florida, or if you're building it for your kids. That's where I would ask those kids if they want it.
Martin Hurych
You surprised me, because I have a big acronym in my head startup = exit. I don't actually know a company where the founder says he has a startup, but he's building it for his kids, he has some investors there, but he's going to deal with them and pay them back somehow. I always see there, and maybe it's just my bubble, that startup = that kind of American, build a company, sell it and then either roll or reinvest it somewhere.
Margareta Křížová
You're right that it's probably more common in the bubble, but I know startups that make beautiful things out of wood, because that's how it is in their family and everybody loves wood, but there are maybe two. The truth is, of course, most people build it for an exit. On the other hand, if someone comes to me and tells us a great idea, wants to scrap it in 3 years and never do anything again, I don't want to do that because I don't like it.
Martin Hurych
Let's go back to the fact that somebody wants me to have the majority but let me have some rights to control it so that I can enjoy it, somebody has it the other way around, I guess that can be negotiated somehow. If at this point I already give the majority away and I know I need more B, C rounds, I have nothing left to give. How do you keep an eye on that?
Margareta Křížová
You really only need to give 10% or 15% at the beginning. That's the vision at the beginning, to say how much money I actually need to get from point A to point B and what is my point B,
how many investors I'm gonna need. I may also decide not to look for an angel, I'll settle, borrow from family, friends and look for an investor when I really have some traction that is interesting. Then I don't have to bid as much, then my valuation is much higher and most importantly I'll ask that investor, which with a VC fund is likely to be able to give more money. Of course, he'll still want a percentage in return, but the negotiation may be easier. You already know each other, you already know how you do business, they trust you more and it's not as draconian.
How many startups are looking for VC capital?
Martin Hurych
How many startups will make it this far?
Margareta Křížová
Not much. It may sound negative, but the amount of startups that are being founded, the amount of ideas and attempts at startups, it's an awful lot. The funnel is very narrow and I sometimes feel a little bit sorry that we only write about those mega billion dollar investments, which I think have two consequences. One is that some people will say screw it because they don't have the money to make it to a billion dollar investment. The other part of them will say, great, they had an idea, they went to an investor and they got a billion, that's the bomb, I'll try that too. I'm also pushing a little bit the idea that not every startup necessarily has to have an investor right away. It can be a small business, and I know small businesses that started out as small businesses, came up with something good and grew. Some grow organically and then you might have that investor come to you and say they'd be interested in you. That's the best option.
What is a startup?
Martin Hurych
I like something that a startup owner from North Bohemia said on the podcast here, and he said that he is comfortable if the startup can support himself and 30 other families, he has a place in that market. But I think this bubble is pretty much overlooked publicly.
Margareta Křížová
There's a lot of overlooking. I'm a big promoter of small business and I bow to those people. To stomp a business out of the ground right in a village somewhere in northern Bohemia that can support 5 families, hats off to them.
Martin Hurych
So as a startup in the field, what should I consider my success in staying in the market?
Margareta Křížová
I stay in the market, I support myself, plus I give work to maybe 5 families or 30, I'm in the market and I'm in the market for the long term. These people often don't even consider themselves startups, they think they're freelancers. The fact is, those articles can sometimes give the idea that a freelancer isn't cool enough. A freelancer is someone who doesn't think of themselves as a startup and often doesn't think of a marketing strategy. In short, he has something that people are willing to buy and will sustain in the long run.
How big a business is investing in startups?
Martin Hurych
Going back to the original topic, angel, pre-seed, seed, some series sounds very cool, very American. We figured that maybe a percent of those people would put it here, maybe a fraction of a percent of people in America. Is it even possible to say how big a business it is in the Czech Republic?
Margareta Křížová
I confess I don't have that number in my head. The truth is that from time to time there's an article somewhere that says it's stagnant, that there is investment in startups, but it's stagnant or even lower year to year. Here I would commend CzechCrunch, which publishes a very nice ranking of deals as well, which is another source to look for investors. CzechCrunch has a list of deals, who invested how much where, a great resource, but I think those deals are happening, but as I said, some are happening without the publicity. I would say that some of the good deals don't have that publicity at all and some of the deals that we both shake our heads at are all over the place. It's a market that's alive, investments are happening and the truth is that there's more money in the market than there are good deals, so maybe the fundraising is based on the fact that these investors have been entrusted with money that they have to spin over a period of time. So they are also under the pressure that that money cannot just sit around, they need to place that money and they need to exit.
Summary
Martin Hurych
That's good news in conclusion. If there were 1 to 3 sentences left of this podcast in the information noise that rages around us, what would it be?
Margareta Křížová
Don't be afraid to have ideas, don't be afraid to try it on your own and small, without an investor at the beginning, because you're not making airplanes. Find an investor who fits you humanly and who brings that know-how and that around, in addition to the money. Look for an investor who has smart money.
Martin Hurych
Thank you very much. I wish you to succeed not only at NEWTON University, but to have tons of such startups around you.
Margareta Křížová
Thank you so much for inviting me.
Martin Hurych
Hopefully, Margaret and I have shown the way to build that dream startup that's rolling America. When you do, it'll be a sign to you and me that we did our job well today. Be sure to check back with us afterwards because then Margaret's chair here will be yours and we'll be happy to show you as a product of this podcast. I'll repeat the request from the beginning, if you like Ignition, definitely subscribe, you'll help me through the algorithms, you'll help yourself informationally, and you won't miss any more episodes. Check out the bonus that we didn't mention here, but Margareta has put together a great thing to help you build the right pitch deck the first time. All I can do is keep my fingers crossed and wish you success, thanks.
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