Investor relations · Investor relationships

Should I tell potential investors that this isn’t the first startup I’ve built?

Maja Rašić QA Tester

May 31st, 2017

My startup has made good traction in the past in the six months and I’d like to start having preliminary chats with investors to gather their feedback and forge some relationships. Thankfully, through the good graces of a team I met in my coworking space, I have a few intros already lined up. This is actually my third startup, and definitely the most promising. Long story short I made a lot of rookie mistakes with the first one and never really had the cash or manpower support I needed to make #2 happen. But I’m fully invested in this one both in terms of personnel and tech. Just need the right investors. I just worry that investors are looking for geniuses with ironclad backgrounds. Clearly that’s not me. Should I avoid mentioning my past failures?

Guy Brockless Head of Growth Marketing

Last updated on November 7th, 2018

Any investor will of course perform their due diligence on the startup. During which they will examine the startup in it's entirety including it's product, business and revenue model, initial metrics and will be focusing particularly on the founding team.

Certainly mention that you have a background in entrepreneurship, a founder without one is far more likely to fail than one who has already felt the "trough of sorrow" and will have the balls to ride it out, the acumen to pivot or the wisdom to shut things down if after multiple pivots traction and product market fit have not been achieved.

Kevin Smothers Founder & CEO of a tech startup.

June 1st, 2017

In my opinion, yes.

My reasoning....

  1. Investors want to know that they aren't just backing an idea, they are backing a person who's been in the trenches and has already learned the pitfalls of business.
  2. Every venture gives you experience, regardless of how short/long term that venture was.
  3. Success and failure both provide amazing benefits. While the benefits of success are easy to see, it's not always easy to see the benefits of failure. You can gain an amazing amount of experience from your failures, just as you can from your successes.
  4. Honesty is the best policy.

Martin Boyd Cofounder

June 1st, 2017

Stop making excuses. Get out there and sell your idea. You'll do great! Failure only makes you stronger.