What Do Investors Look For in Startups?
Investors are paying attention to various things before they decide to put up their money. To invest in a startup means to bear risks. And it’s not only about returns on their investment.
Investors are not just people who have a potful of money that appears out of thin air. They have made their money from a portfolio of investments.
Well, for startup founders, it is vital to understand the investor’s mindset before they even start to look for one. And the critical thing is that every investor is different.
Don’t get us wrong. Investors do care about figures and business models. But also they care about how passionate you are about your idea, your personality, and skills.
Let’s sum up the crucial points of investor’s interest:
- The business model, market size, target audience
- Different business metrics
- The unique set of skills or technologies that make you different from the rest of the market
- Your personality, ability to learn and adapt to new market environments
- The experience and achievements of your team
- The way you can present your pitch
In fact, everything related to you as a founder, or to your project can affect the investment decision. It can be your education, niche expertise, and the number of acquired customers.
You need to know that a startup is not always about money. While it might play a significant role, a good investor will also look for other non-monetary factors.
So, it is essential to design your pitch accordingly. And understand that this founder-investor relationship works on a quid pro quo basis.
For you, as a startup founder, investment is not only about money as well. When an investor gives you money, he or she shares with you an experience, a network, and advice as well.
To sum up, the most significant aspect investors are paying attention to in startups is reliability. And you can earn it by having a constructive idea and utilizing a well-reasoned approach to your startup.
It’s all is up to the founders. Be it a fight against a massive competitor in the market, an alternative to the “usual way to do something” or a clone of a popular product in an unoccupied market.
So, show your strengths and credibility to build a reliable partnership and match with the investors’ requirements.