As an entrepreneur, how do you find the right type of investor? And, how do you then determine if that club suits you? That has everything to do with your goal, future prospects and, of course, your feelings.
Bram Jetten, director/developer at PlanGo, recently posted an article that illustrates why it is essential for entrepreneurs to choose an investor that suits them. He describes his journey as an entrepreneur. The euphoria moments, but also the mistakes, pitfalls and challenges, to finally consciously choose Ēcart Invest as an investor.
Whether you are an entrepreneur looking to grow, sell a business or one of the partners wants to exit, always make a conscious choice for an investor. In doing so, don't take any chances, it will save you a disillusionment.
Basis for growth
PlanGo is successful in the development and delivery of driving school software. In 2022, Jetten reached the magic €1M ARR milestone with PlanGo, a Rails developer, with just a single code base. He did so together with commercial talent and co-director/founder Tom Thijssen and a small support team.
Their story began in 2011, when Bram was an inexperienced developer starting out with Ruby on Rails (a framework for software development). They launched PlanGo with a brilliant marketing idea that led to 500 signups in the first week, way out of proportion for the then part-time team. Bram describes the successes, mistakes, pitfalls, challenges you face as a start-up.
They found out that developing software is totally different from running SaaS business. In 2014, they made an important step toward simpler, faster and more maintainable software, the basis for the business's growth.
The duo learned important lessons in entrepreneurship. Launching an app eventually led to that magic limit of one million recurring revenue per year by 2022. To grow further, additional resources ánd expertise were needed. Based on these requirements, the entrepreneurs looked for the right investor. They made a well-considered decision to sell part of PlanGo. This investor matched their values and brought them the financial resources and the right expertise to continue their long-term growth.
Curious about the whole story? Then read The One-Person Framework in practice.
Investor search
As an entrepreneur, the search for an investor that suits you is difficult and of course you do it partly on gut feeling. Of course, what your goal is important here; for example, do I want to cash in as much as possible or do I want to do it myself? It is easy to get impressed by the talents of private equity. It is a specific profession with specific skills and its own jargon. It's just good not to confuse those talents with entrepreneurial skills and know-how in business management.
There are more and more funds that specialize. This has the advantage that they are a better interlocutor for the entrepreneur. Only, their background usually remains financial and strategic and usually they have not been active entrepreneurs. When making decisions about strategy and operations, the entrepreneur is then still on his or her own.
Sparring partner
Nowadays there are a handful of investors who combine financial/strategic with operational management. They invest in building up sector know-how and business operations through their employees. For the entrepreneur, they are a better sparring partner, who can help them with advice to grow the business. If you choose such an investor, it must suit you.
As an entrepreneur, it is good to choose carefully the type of investor you want. In the exploration phase, talk to them about their actual track record, behavior as an investor, entrepreneurial experience and actual accumulated know-how. Then you will know what you have on them when it comes down to it.
