So you need money to take your business idea to the next level. What options do you have? In this segment, I had the great opportunity to discuss this topic with Hiro Shinohara co-founder and COO of SIVIRA, a start-up developing a blockchain platform. He shares his experience in his hunt for funding for his past and present start-ups.
“In Japan it is very difficult to find funding, but it is out there”, Hiro says. According to him, most Japanese venture capital (VC) firms focus on mid-size companies that have a good track record. There is a mismatch with smaller start-ups that want investment compared to VC firms looking for more established companies. Another option Hiro suggests is to target angel investors.
“Your pitch to angel investors and VCs are different,” Hiro says. “Your approach is different, but the most important thing is to focus on what kind of person you are.”
“For angel investors, be a person that they should care about and forget details like your business plan and future earnings,” Hiro recommends. “Focus on who you are, what you do, and why you are a valuable person for them to know. Don’t be a CEO. Be their best friend. Give them a chance to learn about your strengths, your passion, and your industry.”
For founders, Hiro emphasizes, “It is all about investing your time and sharing your passion when building relationships with potential angel investors. Be in the moment. Enjoy the moment. Do not think about the future. Focus all your attention to the person you are with. They may not end up working with you, but there is a possibility for them to introduce you to someone who will.”
Finally, one of the biggest mistakes Hiro experienced was not having mentors around to give quality advice. Getting funding is one thing. Being wise in using those funds is another. So, having financial acumen is essential. Hiro says, “Angel investors have money, but usually do not have experience in start-ups. They think about sustainable growth and profit sharing. Whereas, start-ups are thinking about buy-outs and IPOs. There is a gap in mindsets between people who are looking for investment and people who have money to invest. You need to look for investors who share you vision and goals and want to help you realize them.”
Points to consider
- Who are potential angel investors in your current network?
- Who in your current network would be able to introduce potential angel investors to your?
- How well do you know your strengths, your passions, and your industry?
- Once you have secured funding, do you have the financial know-how to manage your funds effectively?
- Who in your team would be a suitable CFO?
A huge thank you goes out to Hiro Shinohara of SIVIRA for his time and sharing his experiences with us. For more information about SIVIRA, please check out the links.
Thank you for joining us on Kansai Business Break and we look forward to connecting with you again during our next segment.