WHAT INVESTORS LOOK FOR WHEN INVESTING
Investors have a lot of factors to consider when deciding which investment opportunity to invest in. They need to understand the economy of the country, the risk level, and their criteria for investing. When you first start investing, it’s easy to feel like there are a million things you don’t know. But in reality, there are probably only a few hundred things you need to know to get started. Once you get past the basics, it can be much more challenging to find information on what factors potential investors look for when deciding whether or not to invest. I would like to go over some of the insider tips I’ve learned from working with successful investors like Dan Caffee at Vendendo Capital, who have made successful investments time and time again. These tips aren’t a secret; they’re just not very well known. So, if you want your company to be more investable, keep reading!
a) Understand Your Audience
The best way to get an investor to invest is to be an investor yourself. The investors have different sectors to go for. Some focus on consumer products. Others focus on healthcare or biotechnology. Some specialize in only certain pieces of a company (like debt or equity). Others only invest in early-stage startups, while others only invest in companies that are on the verge of going public. Some do mostly debt, while others only do equity. The point is that there are a lot of different types of investors out there, and you need to know whom you’re trying to attract. Try to get a sense of what kinds of companies your investors are looking to invest in. If you want to attract angel investors, try to get a sense of who the leaders in the space are. If you want to attract venture capital firms, try to figure out which funds have made investments in your specific industry or vertical.
b)You Must Have a Strong Marketing Strategy
Investors are much more likely to invest in a company that has a proven marketing strategy than they are in a company that has a proven product. So, before you’ve even built your product, you need to have a proven marketing strategy. Your marketing strategy should include your pricing strategy, your go-to-market strategy, and your customer acquisition strategy. If you want to get an investment from a VC firm, you’ll need to show that you know how your company will be able to break even. You’ll also need to be able to show that you know how much money you need to get there. If you don’t have a proven marketing strategy, it’s unlikely that a VC firm will ever invest in your company.
c)Be Clear on What You’re Selling
You should understand your business better than anyone else on the planet. You should be able to explain your business to friends, family members, and random people on the street. If you can’t explain your company to your grandma, you need to find a way to make things clearer. If you can’t explain your company to your spouse, you need to find a way to make things extra clear. If you can’t explain what you do at work to your friends, you need to discover a way to make things extra clear.
d)Show investors the ROI
If you’re pitching to angel investors, you need to show them that they will make a return on their investment. If you’re pitching to venture capital firms, you need to show them that they will make a very large return on their investment. If you have an awesome company that solves a big problem and is run by an awesome team, but you can’t show investors how they will get a return on their investment, you’re probably not going to get any funding. Investors are looking for a positive ROI on their investment. They are not looking for charity. If people aren’t willing to put their money into your company, it’s usually because they don’t think they’ll get a return on their investment.
e)Don’t Assume Everyone Knows About You or Your Company
You probably know how amazing your company is. But there are probably a lot of people out there who don’t know about you or your company. You need to get your company in front of as many people as possible. If you’re pitching to investors, you probably already know this. But if you’re pitching to investors but not to customers, you’re probably doing something wrong. If you have a finished product that you’re ready to start selling and someone is reviewing your company, they will probably be able to find you online. If no one can find information about your company online, it might be because you haven’t built anything yet. Investors are looking for things like your website, your social media presence, and your public presence (e.g., press articles about your company).
Final Understanding
Getting your company ready for investment can be a time-consuming and frustrating process. But it’s also an important one. If you want to get funding from an investor, you need to be able to prove how much value your company will add to its portfolio. And to do that, you need to understand what investors are looking for, and you need to be ready for them.