Paul Singh is a seasoned entrepreneur and investor who most recently founded Disruption Corporation, which provides advisory services to angel and venture capitalist investors. He was also a partner at 500 Startups, an early-stage seed fund and incubator program.
As part of this week’s national summit on angel investing presented by StartupAngels, UP Global and The DEC, Singh is coming to The DEC on Wednesday, November 12 to share his experience as an investor and help entrepreneurs understand how they think. Through his guidance on valuations, deal terms and exit strategies, entrepreneurs will learn how to prepare for their meetings with investors and find success in their relationships beyond.
In anticipation of his workshop, we spoke with Paul this past week to help answer the question that seems to be on everyone’s mind: How do I impress Paul Singh? Below, you’ll find 11 things any entrepreneur can do to get his attention—and possibly even his investment.
Don’t be a weirdo.
Set your visions of grandeur aside before you approach a potential investor. Singh says entrepreneurs can be prone to let their passion for their idea get the best of them. “Just be normal,” he advises.
Banish the business plan.
Out of hundreds of investments, Singh has never once looked at a business plan. “Don’t overthink it,” he says. Instead, focus on getting a mockup or prototype out the door before developing a comprehensive plan. “The best founders tend to be relentlessly resourceful,” says Singh.
Instead, talk about traction.
Since the goal of the first meeting with an investor is to get to the second meeting, talk about traction up front in the conversation. If you’ve built a prototype and tested it on 60 of your friends, talk about these details. Doing so will show the investor that you’ve already started to problem solve and iterate on your nascent model.
Know what you’re asking for.
Founders must be aware of the underlying model for the investment and the subtle distinction between an angel investor and a venture capitalist. “It’s important to understand how venture capital works,” Singh says. An angel investor, for instance, can invest in a business for any reason, whereas a venture capitalist must uphold his fiduciary responsibilities to his investors. Without doing his due diligence, a venture capitalist couldn’t invest in your business, “even if he likes you,” says Singh.
Think for yourself.
When a founder approaches Singh and immediately asks him what he thinks about a business problem, he assumes they haven’t done any of the thinking for themselves. He says it’s better to begin the conversation with something they’ve already tried and then ask what he would have done. Ideally, “Show up with a demo,” he says.
Google it.
Singh says the first response to something you don’t know should be to Google it immediately. “The Internet is so powerful,” he says. Every venture capitalist is tweeting and blogging, and deal sheets are available daily online. He recommends founders visit VentureHacks.com for advice and startup resources.
Be prepared to compete with the world.
The globalization that occurred during the Industrial Revolution is happening again. It’s no longer enough to be the best entrepreneur in Dallas; you now have to compete with the entire world. “The market doesn’t care where you’re from; it only cares about what your product can do.”
Pick an investor for the long haul.
It’s easier to get divorced than it is to rid yourself of an investor. (Just let that sink in.) For this reason, Singh advises to proceed into any agreement with caution. “If a founder and an investor relationship goes south, good luck,” he says.
Know the difference between risk and uncertainty.
Singh says it’s important to identify the difference between risk (factors you can control) and uncertainty (factors outside of your control). Always know the risk you’re taking and then find ways to take on bigger bets. Be aware the level of risk a founder can sustain increases as the venture progresses.
Be prepared for reality to punch you in the face.
“The market can be a sobering thing,” says Singh, and when founders reach the end of the quarter, they realize where their goals have been. Whether this realization comes in the form of success or failure, it always catches up with you. “You start to see founders mature into CEOs,” Singh says. “Some of them go off the rails, and some of them kill it and do a great job.”
Accept failure, not defeat.
“The cliché is true: You tend to learn more from your failures than your successes,” Singh says. Not that failure is something to get excited about. “Don’t celebrate failures, but reflect on them,” he says. Even if an idea doesn’t succeed at first, it doesn’t mean you should discard it.
Stacey Yervasi is Editorial Director at Speakeasy, a Dallas-based content marketing and social media agency. With a background in journalism and creative advertising, Stacey brings a deft hand to clients’ blogs, social posts and newsletters. In her spare time, she crusades for proper grammar in text messages.
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