Tired of playing hit and try with financers? Have zero clue on their questions? Well, then tune into ONE CO.Work as we state 5 things an investor wants to know.
Numbers: It’s all about numbers. It always has been and will always be!! The first parameters an investor judges you upon is your ranking on the financial meter. Your financial performance is of utmost importance.
Gear up with foolproof answers on: the financial stability, signs of growth, plans on issuing shares or borrowing money to stimulate growth, debt repayment plan, steps on handling financial obligations and evaluation on revenue streams, acquisition cost and turnover rates.
Competitive Advantage: Venture capitalist have eyes on characteristics such as proprietary features and competitive advantage. They want to know how your solution is better, faster or cheaper than existing solutions, as well as how much better, faster or cheaper it is. If your product or services are not unique, don’t bother knocking at a financer’s door. State facts that shout your market potential is big enough to make investing worthwhile.
Be organized to quantify the customer value proposition, validate that the solution is better or provide data to indicate that such items are meaningful to the customer.
Exit Strategy: Successful investing requires two things – buying right and exiting well. An investor surely wants to know what the exit strategy is and that their portfolio companies embrace sophisticated understanding of the exit strategies. Investors are on a hunt for companies with positive return in a short to moderate time frame. Investor wants to know that a startup is aggressively working on developing the product, partnerships, and network.
Background: Although, passion and commitment will aid you in gaining financiers’ attention. The last thing he wants is that a founder makes mistake on his dime. Thus, investors’ are in search for teams with a track record of high performance and leadership in the company’s industry or in prior ventures. They will dig into your business experience and background. ‘Chemistry’ between angel investor and entrepreneur is extremely significant for angel investors because they generally take a more hands-on approach in the businesses they invest in.
Market Size: Angel investors put their money in solutions that address major problems for significantly large target markets. Contrary to angel investors, venture capitalists look at market features such as significant growth and limited competition. If your customer base is large and stable than your brand has stronger competitive advantage when pitching to investors. As this serves as a validation to de facto that your company has a great impact to its target market.