Think of an investor as a partner in a potential relationship.
The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question, “What’s the worst thing you can say to a potential investor?” is written by Damian Bradfield, president of WeTransfer.
Back in 2010, I joined WeTransfer as a founding shareholder. At that point, we were just five people gathered in a rented room on the second floor of an Amsterdam house that we converted into an office. The floors were cheap, most of the furniture was mothballed, and we only had three desks to work on.
But we knew that WeTransfer was going to be big. We saw that when people made contact with the interface, they used our service—and more importantly, they kept using us again and again. We had observed client growth not only in the Netherlands, but across Europe and America. And we knew that we had room to grow: People were fed up with the competition, with sign-up forms, and with the disruption and complexity of hard drives, USBs, and existing file-transfer services.
So, our early team decided to commit: to go all-in.
This wasn’t easy. We believed that in order to build a young business truly focused on serving user needs, we needed to do our own thing first before approaching an investor. We wanted the time and space to think, and to have the opportunity to discover a revenue stream, set our benchmarks, and work at our own pace. In short, we wanted to be able to create a business that we loved and could fully commit to.
We didn’t want to make our customers pay for our experimental years. Often, we couldn’t pay any salaries. So we relied on lucky breaks and endless hours of work as we searched for a stable revenue stream to keep our service alive.
And, eventually, because we gave our ideas the space they deserved and allowed ourselves to make mistakes comfortably, we figured out what kind of service we wanted to offer and how. We began doubling in size every year. And, finally, our team got its first round of investment, a series-A of $25 million by Highland Capital Partners Europe. Seven years later, our company is now 85 people instead of five, and we’ve added 40 million unique users per month.
Why do I tell this story? Because one of the most important keys to success, not only in securing funding, but also in growing a profitable business, is dedication to your project. As someone who has worked as an investor and an entrepreneur, I’ve seen both sides, and I’ve learned that what investors really respect—and trust—is an entrepreneur’s commitment.
Think of an investor as a partner in a potential relationship. They will want—as would any prospective girlfriend or boyfriend—to know that you have focus, that you will listen, and you will fully be on board, even through tough times. They don’t want to hear about side projects or uncertainty. And, more than anything, they do not want to hear, “This isn’t the only thing I do.”
Commitment isn’t about being polite to your investor; it’s about making sure that your business will succeed. Even with the best-laid business plans, entrepreneurs will encounter unexpected issues: cash flow suddenly dries up, suppliers fall through, a founding team member departs, demand far outstrips projects, and so on. To defy the statistics, you need to believe that your idea is so amazing that you are prepared to work, live, and die for it, no matter what—and then to act on that belief.
Of course, one of the major drawbacks for startups of being bootstrapped is that often, this means you have side projects to keep your head above water whilst you grow your business. That was certainly true for our team.
But when you meet with investors, remember that they are there to help solve that problem for you, and to ensure that you don’t need those backstops anymore. When you are ready to get funding—and that doesn’t even have to be in your first or second year—show that you have created a product or service that you’re willing to stick by.
That commitment is essential for your investor, for your team, and for your product.