Having a world-beating idea is only half of battle. To get a company off the ground you need funding, more specifically, you need the right kind of funding and the right kind of people to give it to you.
It’s not enough to be given a hefty check and head to the bank to cash it. The best business angels and VCs also provide startups with advice, contacts and connections.
Runar Reistrup knows this. After being involved with entrepreneurial enterprises for the best part of 10 years, he’s been through the cycles of funding many times before.
His latest project is his role as CEO of Depop, a social shopping app that looks like the love child of Instagram and Ebay: half digital market place, half social network.
He sits down with Hot Topics to run down how Depop got it’s funding and what he looks for in potential investors.
After getting initial funding from Italian incubator H-Farm, who provided a relatively small amount of money, as well as helping with the design and engineering aspects of Depop, Reistrup opened the app up to other investors.
“Investors from all over Europe came and saw it and eventually it got funded by Balderton in London and Holtzbrinck in Germany and a few others.
As Depop grew Reistrup started looking for a different kind of investor.
“As the amounts increase and the company increases in size there are different partners you’re looking to find, so initially you’re always looking for people who have tried it before, who can really invest themselves as business angels.”
Experience is key in investors. With previous projects under their belt, investors can offer more to a startup.
“As you graduate through you go through VCs who bring a lot of knowledge around how to scale a company; how to build it, how to enter new markets, how to hire the right kind of people.”
What’s the most important feature in business angels and investors that Reistrup and Depop look for?
“We want to work with people who share our vision, so you can have as much money as you want, but if you don’t share the Depop vision it’s probably not going to be a good match.”
To find out more about Depop and its journey, watch the video above.