Accelerate growth with venture

Over the past three years, MapsPeople has grown 255% and employed 20 new colleagues but instead of slowing down now, we’re just about to really accelerate our growth. However, growing requires resources and it also requires strong professional skills. That’s why we chose to find a competent investor to help us boosting our growth.

 This blog post was written by Michael Gram, MapsPeople CEO and Partner.

MapsPeople is based on a partner strategy. This means that we have to stay the best - always. Being a market leader within indoor navigation has been our vision since the day we disrupted our own company and created MapsIndoors. We’re proud to be one of the leading companies in our field today, but that’s no reason to rest on our laurels now. Our partners work with us because we’re really good at what we’re doing, and if we don’t stay in front, we’ll lose our attractiveness. Now we’ve reached a point, where we need to grow faster than the market to maintain our position, and that’s where the venture enters the picture.

Growing and increasing your revenue is easier when you’re a smaller startup company in an immature market. As MapsPeople gets bigger, we need to grow even more to stay on the upward-sloping curve. This means investing in going abroad, investing in marketing, and investing in sales. Obviously, this requires money and thus investors. 

Like with everything else when it comes to running a business, there’s no single right way to handle the venture process but I gladly share my experiences if it can be of any help to others.

What investors care about

When we were about to start our search for an investor, we were actually contacted by several investors - among them the Danish Growth Fund who we later on entered into venture with. At that time, there had been a lot of media coverage of MapsPeople, which draw investors’ attention to our organization. Of course, this gave us a head start; They had already shown their interest in MapsPeople, and we “only” had to convince this first partner that he or she was right in contacting us.

In my experience, the Investors initially cared about two things: The business model and the scalability. MapsPeople is a subscription based company and the recurring revenue proved to be very important; Investors are only in for the short run, and most of them expect to get 5-10 times their money in return, so the recurring revenue is one of the main parameters. They also really cared about the scalability. How can you increase your revenue without increasing costs proportionally? Since licensing is a large part of our business, we have the preconditions for succeeding in this point but it’ll require hard work.

After convincing the first partner to invest in MapsPeople, we had to convince the remaining partners of the VF Venture Department in the Danish Growth Fund. In this process, the first partner became our “guide”, which was of great help on this journey. The venture process was a “learning by doing” process for us, but with an insider on our team, we could really focus on the things an investment fund finds important.

And what do they care about then? It’s easy to think that your idea, your product, is the most important thing, but it’s not. In our experience, the team is the most important thing and then the execution. Who’s running the business and how? Are they capable of further developing the company? Then there’s the idea on a 3rd place.

You also need to figure out how much money you need and the valuation of the company. Define exactly what you need for each step of your plan including a time frame visualizing every step. And of course, you must be able to explain when things begin to yield.

Finally, you need to build a really strong and convincing pitch. You have to be very clear about your value propositions. What makes your company and product attractive to customers and end users? Give them a razor-sharp and to the point market and competitor analysis showing your position in the market. Explain your business model and go-to-market-plan. And more importantly; gain their trust. Show them your best showcase so they see exactly the potentials of your product.