It would be great if you could understand what your investor is looking for, what they find as an attractive investment and what their criteria really requires, wouldn’t it?
Over and over again, investors are asked what they look for when deciding to invest in a new company. The answer invariably comes back in the form of a list. A list of questions that will let the investor draw a picture of the new start-up or established business so they can decide if the future is clear or filled with obstacles. Here’s the list of most asked questions.
Fulfill a market need – Is there an obvious demand for your product? Is the product innovative? What problem is the product solving?
What provable progress has the company made so far? What did your first-year sales look like? Do you have some kind of a customer base? How has your business grown?
Does your business have real market potential – Does the market have potential to grow beyond what already exists? How much room is there to expand?
Do you have the right team in place – Are they good mentors, product builders, experts who know the industry and who have committed to the potential of your idea?
Have devoted founders – Are you passionate enough to sell this product all day, enough to make the necessary changes when required? Do you have the time and dedication it takes to devote to this start-up idea? Investors can read you and will be able to tell if you aren’t 110% committed.
You can prepare yourself somewhat by investigating the investors, and its investing patterns. Anticipate rounds of extensive questioning so make sure to prepare yourself with answers.