Felix Haas is a co-host of the Bits & Pretzels Festival, an investor and a successful founder. With Munich Startup, he talked about the things he never wants to hear again as an investor and why feedback is one of most important assets for a startup.
“This is not the only thing I do.”
As an investor, I expect my startups to be fully committed. Side projects and doubts are not what an investor wants to be confronted with right after investing a huge amount of money in a company. Having a side job because it is necessary to keep your head above water is perfectly understandable, but can also be difficult. We are here to solve those problems.
“Our team is better than all the rest.”
Yes, investors look for teams and people who give them the impression they will never give up. They should have complete knowledge of their own product or service as well as the relevant market, while also having a profound understanding of their target group. Likewise, teams with less experience have to figure out their personal strengths to be able to convince investors. The only time the situation becomes difficult is when teams think they are lightyears ahead of everyone else. This is where we have to give them a no: saying your team is better than all the rest is considered naive, and investors are not fond of unrealistic founders. Confident, yes, but please don’t be overconfident.
“We have no competition.”
A good tip: do your homework. It is very, very unlikely that your product does not have any kind of competition whatsoever. If you are not able to find anyone, research better. If a startup claims to not have any competitors, that can either mean a market does not exist yet, or that lazy founders have not done enough researching. Neither of the two are good signs for an investor. Speaking of research: if you are not able to find any competition, use yourself for comparison! Size, sales, costs: the more information you can collect, the easier it will be to assess yourself and your company, especially in the beginning.
“We were first.”
They say timing is everything. Being the first to introduce a product to the market has its advantages: there are no current competitors, you have leeway in pricing and, ideally, advantages in terms of image. Unfortunately, your company might face just as many major disadvantages and risks. Other companies might make an improved copy of your product and quickly leave your startup in the dust. Often, startups can’t do anything about it; they do not have enough capital, experience or contacts to keep up. As a pioneer, you also have very little information available. Uncertainty about further market development, the amount of effort needed to win over customers without detailed needs, and the risk posed by technological advances are serious risks faced by pioneers.
“It is all for free.”
Free? That sounds really bad to an investor. To claim that the product, service, or rendition of services is free of charge does not exactly point towards a high return on investment from the startup. Even if the intention to collect money from advertisers promises high returns, you should not forget than a substantial amount of your own capital will first be needed to get customers on your platform.
“No, I don’t think so.”
Feedback is (in addition to financing) the best thing you can get after a pitch. When someone is giving you feedback, it is not useful for your reaction to be contradictory, ungrateful, or dismissive. Of course it might be possible that your “visionary” startup team is pursuing a goal that the rest of the world simply has not understood yet. Nonetheless: feedback from customers and investors is the most valuable asset that you can be given. Our intention is not to be mean, but to instead steer your company in the right direction to make it successful in the future.
About the author
Felix Haas is a co-host of the Bits & Pretzels Festival, the founder of numerous startups, and also a business angel for more than 80 European and international startups. He lived in Silicon Valley for two years and likes to spend his rare recreational time flying.
For the perfect opportunity to network among founders and investors, the Bits & Pretzels Festival will be held again this year in September.