Back in June of this year, SyndicateRoom hosted An evening with Simon Calver: The future of learning, at Imperial College London, where Simon spoke about the trends that he sees in edtech, and taking an investor’s perspective in terms of what to look for in those types of companies.
Here is a summary of Simon’s investor checklist - what do investors consider when choosing companies to invest in - what are the challenges and considerations, and how is this helpful for entrepreneurs?
According to Simon, one of the key challenges for investors, especially if considering investing at an early-stage, is that “50% of companies they invest in probably are not going to make it” and investors need to accept that they will make the wrong decision along the way - companies need to make their objectives clear and update investors throughout their journey and development.
Traction - an investment opportunity is significantly more attractive when there is evidence that a product is being used, with evidence of how it’s improving outcomes. A key factor Simon Calver told us he looks at is the rhetoric over the last 6 months, for example with budget cuts in each sector. He then weighs up these sector budgets and the demonstrable demand for the product/service in question to determine which offers the best traction, or is worth following.
Investors are interested in whether a company offers a regional or a global solution, in terms of looking for real scalability and transferability. Wedging yourself in one individual market can be a hindrance when looking for investment.
The team is an essential consideration for any investor. Simon referenced Sheryl Sandberg’s book called Option B, which presses the importance of resilience in a management team, where, although there are always “speed bumps” and challenges along the way, people need to be able to adapt and change. Simon added: “Unlike fine wine - people’s issues never improve with age.” Simon mentioned how important it is to trust your intuition - investors look at the founding and management team to see if they have awareness of this and the ability to hire the right people.
The final point Simon Calver made in relation to what investors look for is: “what is the breakthrough/real point of difference that will enable this company to succeed over others?” Is it quality of thinking and identifying the opportunities, or is it the executional capability and executional skills that make you stand out from the crowd and will make your company the one to triumph? An investor will want to see what makes you stand out and be the company to back in the market.
Interested to find out more? Watch Simon’s keynote speech.