Remember that point you were trying to work out the way to pitch your business? the primary step here is to ask yourself the proper question. A customer can only be addressed if you’ve got a good grip on what they’re trying to find , your investor must even be approached after carefully considering what they’re trying to find . Every investor looks surely factors when considering a business and therefore the more boxes your tick, the upper the probabilities of scoring an investment. once you started your venture, what were your goals? Profit? Attracting new customers? Innovation in your field? Investors are businessmen too, they’ll have similar goals and understanding their goals is that the initiative here. but 50% of companies make it to their fifth year, and therefore the investors are looking to take a position at the proper place.
While scalability, feasibility and therefore the future scope of a business are the apparent factors that an investor primarily takes under consideration , Insellers took a glance at another factors investors consider before investing during a business.
Financial Potential
Investors are businessmen too who search for profit. Remember, unlike a loan where you’ve got to supply collateral security, investors are depending on the financial potential of your business. Here, you’ve got to supply hard facts to substantiate your claims. If your business has been running for sometime, showcase the profit you made and therefore the income you were ready to generate with the limited capital at your disposal. this will prove the efficiency of your management while putting available resources to optimal use, and would help the investor visualise what you’ll do with their investment.
If your business is at the initial stages of development and doesn’t have numbers to point out , then present your plan for the longer term of your company. confirm your plan is set-out with achievable and time-constrained goals. Most investors consider the returns on their investment (ROI) and take a choice after careful analysis. If you’ll began an idea whereby the income is managed optimally, you’re bound to land that investment. Another important detail that has got to be laid out here is that the exit strategy. Making business decisions requires a careful analysis of the pros and cons and therefore the investors analyse the exit strategy because it’s their contingency plan just in case your company fails to satisfy the set standards.
Competitive Advantage
A thorough analysis of the sector and sector of your business would yield many facts that might govern your investors decision to back you. If an analysis of the market proves that your company offers nothing unique, the investors are more likely to show you down. Your product or service must have a USP that permits you to face aside from your competition. If your company has a plus over your competitors, confirm to spotlight that time along side numbers that time to an equivalent . Let’s consider a well-liked brand as an example for instance now better. When the rumoured features of Moto G Stylus hit the news, the merchandise aroused the interest of the many . Why? Because mid-range options for stylus phones were scarce and therefore the ones that were affordable for the typical customer didn’t offer many other wanted features. Netizens hailed Moto G Stylus as a fierce competitor for the Galaxy Note series. Now that’s what we call a plus . Your business could also be small or medium sized and your USP might not be as flashy, but if you’ve got an assured advantage over your competitors, convincing investors would become an entire lot easier.
Compatibility
The key here is to know the sort of investor and what he’s trying to find . There are differing types of investors, like angel investors, venture capitalists (VC) and peer-to-peer lenders (P2P). While of these investors follow similar criteria when investing, there are some marked differences that has got to be considered. as an example , a speculator looks for the individuality of your product and that they are more likely to require risks. they need to take a position during a niche that’s underdeveloped as they will reap benefits before the world becomes more competitive. An angel investor would also give significance to the profitability of your business and therefore the business model you’re following, but they’re more likely to take a position if your product is targeting an outsized customer base and in contrast to VCs they appear for knowledgeable founders to minimise risks. Peer-to-peer lenders, like Upstart, LendingClub, Peerform etc, give serious thought to your experience within the field and your credit history.
YOU and Your Team
This may not appear to be a clear factor but many investors consider this criteria relevant when choosing to take a position . Most investors would really like to require the position of advisors and oversee how their investment is being put to use. to figure in close association together with your team would require some amount of respect and compatibility. Your attitude and therefore the behaviour of your team also can impact an investor’s decision to take a position in you. Angel investors often consider the leadership and management qualities of the founders they might be working with before making their decision. Not all investors take decisions solely supported hard facts, some investors combine their rationality with their intuition. These investors might be won over by working up a chemistry with them.
Conclusion
The perfect pitch doesn’t solely depend upon hard facts and results, some pitches compute because the founder decided to inform the story of his company and add a private touch thereto . No two investors are an equivalent and regardless of how the trends are analysed and crunched down, you’ll not be ready to convince some investors. However, that ought to not dampen your spirit. Do the research and pitch your ideas confidently, but if the investor is doubtful and needs more data or another risk analysis, don’t get agitated. Tackle the questions calmly and do your best to place your investor’s doubtful mind comfortable . Remember, they’re also businessmen and what they have is assurance of success.
