A startup is a commercial project that is developing a breakthrough technology and requires multi-stage funding. When evaluating the prospects of an idea, you need to analyze it from various angles while considering the market situation. According to Marina Groenberg, the most difficult thing is not creating a business idea, but implementing it. To successfully execute a project, investors must anticipate and quickly respond to all factors and circumstances that may affect its development. How can one make the right choice? What factors should be taken into account when searching for and evaluating a startup?
Startups – how to find a project with great potential
Experienced investors look for startups in a niche that they are well versed in. This does not mean that they will not engage experts later on, but knowing the specifics of the problem makes it possible for them to be on the same page with the startup founders. This, in turn, leads to developing healthy working relationships that are essential for the alliance between an investor and an entrepreneur.
The search for startups is a continuous, never-ending process. Only 3-4% of the projects that fall into the funnel reach the ‘finish line’, and the first applications to be processed are the ones that the expert panel will find the most interesting. Investors are on the lookout for startups that, in their opinion, can pay off in a few years.
On the other hand, entrepreneurs are also looking for investors to develop their ideas – they submit applications to VC firms and online platforms and make use of networking. What matters for venture capital firms – those that support startups with global potential – is the possibility of rapid scaling of the project. Their priorities lie in IT and biotechnology. Investors listen to their intuition and weed out anything “uninteresting” right away, at the stage of getting to know the project.
Selecting and evaluating a startup – advice from Marina Groenberg
It is difficult to assess the prospects of a project if you are not an expert in a particular field. Moreover, investors should have entrepreneurial experience working with startups, they should know the pitfalls of the development phase, be mentally resilient and have a wide enough network of business contacts. Another important aspect for investors is their reputation in the business community. Due to the fact that most startups are costly projects and require tens and hundreds of millions of dollars in capital investment, they are developed by VC funds and not by private investors. It is the funds with strong financial support from partners that can offer a competent assessment of future technology.
According to Marina Groenberg, the preparation phase is the most difficult and time-consuming. During this period, it is necessary to evaluate the business idea, visualize a so-called concept (or the ‘big picture’), set priorities and focus on your vision of the startup's prospects and business strategy. In her opinion, you need to obtain at least three analyses from three different experts. Only then will you get the full picture.
A feasibility study begins with an analysis of Internet sources, followed by a list of the main questions and consultation with other investors. After that, you start to gradually narrow down the range of specialized institutions that will later act as your experts. Having extensive experience working with investments, Marina Groenberg warns everyone against being over-ambitious. You should only deal with those startups that spark your interest and inner confidence of success and not just go after what is “fashionable”. Furthermore, no investor is immune to mistakes. For example, a seemingly hopeless project may make it to the top after you have already abandoned it. What matters in this situation is to have no regrets and move on.
Marina Groenberg – short biography
Marina Groenberg is an experienced investor, successful businesswoman, and co-founder of Hemma Group. The company was founded in 2009 and currently has projects in America and Europe. It prioritizes investing in ESG technology. Its most successful projects include:
· NexWafe (Germany), which produces photovoltaic solar wafers using a special technology that reduces carbon dioxide emissions by 75% and halves production costs
· Tallano (France), which develops the TAMIC absorption and filtration system, reducing fine particle emissions from the braking systems of cars and trains by 90%
· Kopter (Switzerland), designing the next generation of helicopters – the project has been sold to the Italian company Leonardo
Marina is a Swiss citizen. Her husband manages Hemma Group projects in Italy – the Villa Reale di Marlia cultural restoration project and the SurReale restaurant in Lucca – and enjoys piloting planes and helicopters. The couple has two daughters. Another interesting fact from Marina’s biography – she has three university degrees and speaks five languages. She leads an active lifestyle, with interests in sport, travel, and haute cuisine.
How do you find and evaluate a promising startup? Marina Groenberg’s expert opinion on investing
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