3 Things That Are Killing Your Startup

Written by Tom Fairey

9 March, 2022

Angel Invest CEO Jens Lapinski on Pitch Decks, Winning Investors, and Raising Money

Jens Lapinski is one of the most active angel investors in Europe these days.

The current CEO of Angel Invest holds a BSc in Genetics from Leeds and a Ph.D. in biotechnology from Cambridge. He served as a vice president of analysis and consulting at Library House in Cambridge before founding aiHit in 2007 and later being a partner at Forward Internet Group and then a managing director at Techstars in Berlin.

Angel Invest is a leading European angel fund based in Berlin and Frankfurt. The company makes more than 20 investments per year, usually starting around 100,000 euros, and coaches founders from pre-seed and seed through Series A.

I recently interviewed Lapinski for an episode of my podcast, Back Yourself.

“The beauty of startups is you have a super ambitious team trying to do something no one else is doing and getting it to work,” he told me. “If you have those three things in combination, that is where magic is. With a model, then you can scale rapidly and produce big companies.”

Recipe for a Successful Launch: Great Startups Have Great Teams

When looking at startups to fund, Lapinski first looks at the team that has been assembled.

“Is it really a team?” Do they have enough substance to deliver a minimally viable product to customers?” he asked.

Many times, Lapinski said, a team will come to him seeking funding that is not really a cohesive unit — perhaps there is a CEO and CTO, but they went out and simply hired a financial person. That is a red flag, he said.

“The person has to be integrated into the team,” he said. 

The next step in a successful launch is having a superb understanding of who your customer is, what they want, and how you are going to build the product that does the job — the thing that delivers the value proposition.

“If they can’t do that, there is no reason at all to invest in someone,” he said. “They are just throwing darts.”

3 Things Guaranteed to Kill Startups

Lapinski has examined hundreds of startups and seen many commonalities between those that make it and those that don’t.

Things that kill startups, according to Lapinski, are:

1. The team fights

2. The team builds something that their customers don’t want

3. Someone else does it better

Fighting is a critical problem, he said. It shows you have teamed up with people who can’t work together, although the fight itself could be about control, power, or vanity.

“You want to avoid that at all costs,” he said. “That is the most important thing. It is really quite destructive.”

If you can avoid those three mistakes, however, you may find you are still confronted by an issue that slows you down. There are innumerable things that need to be worked through in a certain sequence, and getting any of them out of order can set you back by weeks and months.

The main slowdown, Lapinski said, is spending too long testing products.

“Your job is not to produce the perfect product,” he said. “Your job is to learn as quickly as possible what customers really want and to validate that your initial processes are correct.”

What Is the Ideal Startup Size? The Answer May Surprise You

Other problems arise when founders raise too much money too quickly and put it into personnel, creating teams that can’t be managed or organized.

The ideal startup size is probably smaller than you think, Lapinski said. Overall, the initial team should be as small as possible. How small? While every situation is different, a good rule of thumb is that until you have a good product, your team should be small enough that a large pizza can feed it.

“Six people, until you think you have really understood what your customer wants,” he said. “Six people is what a big pizza can feed.”

What Startups Should Put in Their Pitch Deck

Your pitch deck should sell an opportunity, not a product, Lapinski said.

While it’s true that your product has to solve a problem for customers, your investors aren’t experiencing that problem and they are not your customer.

Want to get into the mind of an investor? Spend a day buying stocks, even if it is just a small amount. The pitch deck is similar to buying a stock — You say that today your value is low but soon it will be huge, and that investing with you is an opportunity to be a part of that growth.

The Takeaway

Startups have a hugely difficult task when it comes to securing angel money. Those investors look very closely at prospects, and often with just a few things in mind. Remember: you are not selling investors a product, you are selling an opportunity to make money.

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