What do investors think of concepts with competing startups doing exactly the same thing as you?

Investors recognize that most concepts will have direct or indirect competition. In many cases, there will be a few other startups or established companies planning ventures that are fairly similar to what is being presented by a team.

Investors prefer honest answers, and the comfort of knowing that the team has indeed evaluated the competition and have some thoughts around how they intend to be one up in the game.

In some cases even a honest answer saying “Well, they are pretty similar to what we are doing. However, there is room for more than a few payers and we are glad that we do not have to create the market all on our own. We do however see us having a significant edge over them in the quality of the team.”.

What investors are not comfortable with are boastful claims with little substance to back it. We have often heard many entrepreneurs say “Oh, their product is just not as good as ours”. One should remember that while having a great product is certainly an advantage, having a better product is not necessarily a guarantee of success or leadership.

 

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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