c Startup milestones: key to getting funded
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What is the holy grail for venture capitalists?

Boris Bogatin startup milestones Boris Bogatin startup milestones

Want funding? After 14 years as an entrepreneur and investor, Boris Bogatin of Lumia Capital says that startup milestones are key.

1. Learn the difference between critique and criticism

Investors are pretty smart and savvy people, the reality however, is that they can come off as critical and as not giving the most constructive reasons if they end up passing on your business.

Having said that, making sure you learn and incorporate their feedback into your startup milestones are incredibly important. There’s a lot of wisdom and experience pent up within the things VCs say.

As such, you need to understand how to take their advice and use it to its fullest to best improve your fundraising strategy and move forward with your business in accordance to startup milestones.

In my experience there are two ways in which an entrepreneur deals with criticism.

The first way, is viewing criticism from the wrong perspective. As a result, some discard it entirely and see it as an attack on them, and prepare to defend such input in the future. They also then further entrench it in their thinking unilaterally, believing they know something that the market doesn’t.

The other way of taking criticism, and in my opinion, the right way, is for entrepreneurs to leave a pitch or meeting thinking how they’re going to spend time going over the criticism as strictly feedback and seeing how they can be better as a result.

They are able to incorporate parts of the feedback that they believe to be supportive, improving their fundamental unique market insight that makes them entrepreneurs, and discard the feedback that’s misplaced, while being able to heed its importance to investors and figure out how to either position the business differently or which different type of investors to target as a result.

I see a lot of entrepreneurs not being able to do that, they take the feedback as criticism – and yes, it is critical feedback, but ultimately it should be listened to. And the best listeners, the best people that know how to relate to people, understand that it’s not an attack on them, rather it is just true and honest expression of how those investors think.

The most important piece of advice I could possibly give to an entrepreneur is to set startup milestones and accomplish them

There’s an excellent book called Non-Violent Communication by Marshall Rosenberg that I’d recommend, it has really guided me in many respects, personal and business. The book talks about how to relate to people, yourself, and teaches you to recognize that criticism is never ever an attack on you, no matter how much it may seem that way.

Instead, criticism is purely a miscommunication of what someone truly needs, including from an investment. For entrepreneurs especially, to be able to embrace the world this way becomes very powerful. It ultimately will feed into those all-important startup milestones.

2. Find investors that believe in the theme underlying your business

My specific orientation and focus when investing is to be thematic, to identify promising areas of opportunity and understand and find companies that are really exploiting these areas most effectively.

As a result, I’m able to meaningfully connect with entrepreneurs around their vision and understand its significance much more elaborately than others; move through the evaluation and diligence process much more rapidly leveraging extensive prior expertise base built-up in this area; and ultimately, show much greater conviction and support to the entrepreneurs.

Entrepreneurs should carefully screen out investors based on their perceived level of interest and understanding of their space, and how much conviction they have around it, as that will dramatically reduce the time to fundraise and the efficiency of the fundraising cycle.

3. Startup milestones are a VC’s holy grail

The most important piece of advice I could possibly give to an entrepreneur is to set startup milestones and accomplish them. Change from thinking about startups as some golden opportunity, some grand idea, and instead think of them as a business.

Why? Because startup milestones form the basis of how you build your company. VCs want to see that, because they want to know that:

a) You know what you’ve done in the last go-round up to now in order to build sufficient momentum in the business, while also de-risking it consistent with its stage, in order to be out there raising this next round.

b) What you’ll do with their money over the next stage will yield accomplishments consistent with the startup milestones you’ve set for the next stage, but most importantly will yield investment from the next stage of investors at a mark-up to the current round – at the end, that’s the most important thing that an investor thinks about.

Entrepreneurs who adopt this approach, plainly laying out what they set out to achieve in order to raise funding, and then what they’ll do with this money to raise the next level of funding, shows a mindedness toward growing a real business which makes it that much more backable.

Of course, being honest and making sure that you deliver on what you say is equally important. As an entrepreneur, you must make sure that you run your business, not just talk about running it, so setting milestones in a way that are credible to investors gets our buy-in.

These startup milestones are key, and once you show you’re meeting them, you’ll get funding time and time again.