The advisors at Sophia Business Angels are a team of successful men and women who previously enjoyed careers as entrepreneurs or corporate executives and bring international expertise from diverse disciplines, industries and countries. We will be using this column to highlight a member to learn a bit more about them.
This month, please meet SBA member Olivier de La Meslière.
Q. What made you want to become a startup advisor and angel investor?
A. I have a knack for teaching what I know, and I like helping people when I feel I can be of assistance. Plus, the startup ecosystem is a Noah Ark of so many types of people! It’s fascinating to be in the middle. I always enjoy sitting in a meeting where you have people speaking different languages, say, tech people, seasoned investors and conscientious lawyers… and help them understand each other! It’s funny how many times I have witnessed startup founders unwillingly wrongfoot investors while pitching their business plan. That’s when they need an Angel to put the discussion back on the right track.
Q. Can you tell us about an interesting startup you are involved with now?
A. There are several startups I could spotlight, like Nuritas in Ireland, or OnOff Telecom in France… but let’s talk about my latest investment in Binah.ai, an Israeli startup that came with a wonderful promise: get vital signs in less than a minute from a simple video of a person’s face, taken by her smartphone!
Through a unique mix of signal processing and artificial intelligence technologies, the app can extract: heart rate (within 10 seconds of a video of your face!) oxygen saturation, respiration rate, mental stress levels and heart rate variability. Hemoglobin levels and blood pressure will be added next.
In a nutshell, this startup has created a product and a service that dramatically improves patients care through remote health monitoring. This has many applications in today’s post-Covid world. And that captivated me..
Q. What do you look for when evaluating a company to invest in?
A. There is no doubt the human factor plays a decisive part in the success of the startup: of course, hearing about all those crazy new ideas from founders is really the fun part for an investor in startups. The dynamic of creation, the unchartered territory of innovation, the creative genius and the wild dreams…that’s exhilarating. But it all comes down to execution. So you’ll need people with the ability to execute the plan. Operators. Not inventors. Finding someone with both qualities is a rare jewel. So when you meet one, don’t let him go!
A good rule of thumb is to back a serial entrepreneur. You know he has weathered the storms of setting up and scaling a company, plus he has already walked his way to success…so it is almost a no brainer to back up a repeat entrepreneur
Q. Any advice for entrepreneurs thinking about starting a business?
A. Many young would-be entrepreneurs confuse starting a business with raising money to start the business…
A standard business normally goes this way: clients pay good money for a product or service they like, the company can then pay its employees, use the funds for R&D, and ultimately send dividends to its shareholders.
A startup business, as it is understood nowadays, goes the other way: shareholders put money into the fledgling company, which then uses the funds for R&D and to pay salaries, then the startup looks for clients who will, hopefully, buy their product or service…
when you think about it, it is exactly the opposite process of a standard business. And it does not help young startups to get a lot of money upfront. My advice to young founders: Remember that you should raise money from your clients first… that’s the essence of a business. Don’t raise the money to develop something nobody needs.
I have seen so many startups whose business model seemed to be “raising money” instead of attending clients.
Of course some business models need to be financed before they have a single paying clients, but it should be the exception, although it seems to be understood nowadays as the rule.
So when you ask for money, think about how you will be able to give it back, with a return, to investors who put their trust in you: if you are not confident with your answer, go back to work on your business model..
Q. Any advice for entrepreneurs pitching investors?
A. There are a couple of common mistakes entrepreneurs should absolutely avoid when pitching investors.
I think the most common mistake young entrepreneurs make when they pitch investors is to not fully grasp the competitive landscape: “We have no competitors” is the wrong answer a majority of startup founders throw back at you with great pride. This is an absolute red light for investors, as it shows the founders’ misunderstanding about the business they are in.
Be prepared to tough questions when you pitch, be prepared to be challenged, to be interrupted during your presentation.
Questions entrepreneurs usually are ill-prepared to answer is: “What are the risks of your business?” or “How could it go wrong?”
Q. Are there any specific industry sectors or product categories you prefer?
A. No. I like to fund successful businesses, not smart products. I try to resist funding a startup simply because I like their product. Or simply because I like the team. You should see behind the product, behind the team. The exit is all it is about. “Who will buy the product?” is a good question. However, “Who will buy the company?” is the one you should answer.