Investors invest their time and money in businesses that they think will make them more money. So if startups can demonstrate how their business will make their profit, they make it about 90% of the way to secure investor funding.
Strategy and sustainability
Due to the rise of different types of businesses, it is important to paint a company picture to potential investors.
Investors want to know what the company offers and how you will reach your target market. Without this, it’s much harder to get funding or keep the business afloat.
Investors like to know what about your business makes it unique and why. They also want to learn about the strategy you’ll adopt and how you plan to sustain it.
This will help the investors decide whether their investment is in the right business because they want to reduce the risk when investing in a new business.
Team members
Who are your team members? Do they have the skills, other qualifications, and areas of expertise that the organization can use in the future? Your investors should know these things about you and your team, as well as whether you’re good at sourcing talent that can fit well with your company. It is an added advantage that encourages investors to support and fund your business.
Business plan
Do you think your business will be profitable? It’s important to remember that money is the main factor in business success.
So you need to make sure that your pitch presentation includes how you will turn a profit or make money from the business.
You can attract investors by creating a solid business plan. It shows that you’ve spent time giving attention to your objectives and how you intend to execute them to become profitable.
Among other things, a good business plan should include:
- Your target audience? With data to show why it’s interested in the product.
- Sales channels, with data to show which ones will be the most effective.
- Marketing plans and goals, with data to show why they will be successful.
- Projected timeline for when you’ll start making money.
Traction
Investors want more than a great idea. They want to see that you’re not just incredible at pitching or crafting business plans. They want proof that you have caught their attention (and grabbed the attention of potential future clients). Building a product with no funding, finding early customers, or hiring talented people are all proof of how resourceful and passionate you are.
Cash flow and a financial plan
It’s not hard to see why this is important. After all, it’s at the heart of every investment. If your business doesn’t make any money, it’s not really a business.
Cash flow is arguably the most important part of a business plan, and you need to keep track of where all the money is going. You must have enough money coming in to cover all your expenses. Seeing a good return on their investment is important, so they need to know how long it will take your business to turn a profit. Your financial projections in the business plan outline the average time until you’ll reach breakeven and when they recoup the initial investment.
This is something investors will be looking at closely, so you should make sure to plan thoroughly.
Market research before pitching
Building a successful business requires expertise in various areas, such as knowing your customers, understanding the industry you’re operating in, and being aware of the competition. When you investigate the data behind the products or services on the market, you’ll be able to reduce business risks, spot new opportunities and trends, and identify any potential problem areas.
Understanding your business is one of the most important things before approaching an investor. This includes doing market research to learn how to improve and the aspects that will set you apart from the competition.
Conclusion
Investors are putting more money into fewer deals. If you, too, have some credibility, your chances of getting funded will be much higher. In order to receive funding, you should have an idea of what you will do with the money and how the investment will be structured. The more future-focused your plans look, the better it is for your prospects’ plans. Investors take many factors into account before investing in a company. These include individual requirements, interests, and pursuits of the investor. Make sure you cover all the necessary aspects if you want to have a chance at getting funded.
