Are you planning to start a business and looking for investors? Are you looking for few things that make a company or startup investable?
Many business owners and entrepreneurs often get the idea of financing their business or venture from outside investors. Yet what's surprising is that many of them do not have an idea of what makes an idea, venture, or an existing business investment-worthy. The truth is, many of the things that make a business investable are rooted in fundamentals. Here are a few common things:
1. The Team
2. The Vision and Scale Factor
A company or startup should always exist for a specific purpose. Whether that purpose is found today or at a later point in time is a different concern. What's important is that the founder or business owner understands the problem it's trying to solve and the vision of why their venture is the right solution for addressing that market need. Whether you're operating a food stall or starting a new deep-tech venture, the founder's vision will always be critical in convincing your investors to pour in money.
Scale is also one important thing to consider alongside this vision. Here are just some questions an investor will ask from a founder or business owner when deciding to invest. How big of a market do you have? How big of a market can you realistically penetrate? How big of a bite can you take out of this pie, considering your resources?
3. The Product and Business Model
Your business venture or idea needs to address a particular need, whether your customers are end consumers (B2C) or other businesses (B2B). It's important to understand that demand for your product or service will also be a factor in the market's needs you are trying to cater to. Here are some questions that founders should keep in mind. What makes this product unique from the offerings of your competitor? What is the distinct advantage of availing your service versus the other? Are you trying to compete in price or quality?
4. Traction and the Ability to Execute
A venture need not always have an investment when it starts. Sometimes, entrepreneurs end up having to bootstrap their venture due to limited resources. When able, it is important to be able to demonstrate traction wherever possible. Whether this is measure in terms of sales, profits, the number of customer serves, the number of transactions, or other related metrics, it's vital that you demonstrate figures that show progress to any investor. This allows them to see that you have the ability to execute, which is a weak point of many entrepreneurs.
Some founders and owners often mention that they need capital to excel. While this may be true to a certain extent, we see that this sometimes becomes an excuse. Remember that many of the great tech companies we have today started from their home garage!
Need help in finding investors? Contact us at info@greenpointconsultancy.com.
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