It is a fundamental question that every start-up has asked: “What are investors looking for in a start-up?”. While investors might review hundreds of different start-ups each day, they all evaluate them according to a few, but similar key points. By covering the basis of these areas, you enhance your chances of attracting that much-needed investment.
Have your Business Plan set-up
The first step to becoming investment ready is to ensure you have a business plan in order. This includes a Business Model Canvas and a Value Proposition Canvas. These are strategic templates, often seen as essential elements for a start-up. If your business is in an accelerator or incubator facility, you will often receive training and assistance on filling these out. You can also download a free template on Strategyzer.
Know your Competition
Be aware of what you are up against. Not only will this enable you to strengthen your own business model, but also analyse the weaknesses of the competition. Is there a market area they are not targeting yet? Do they lack in a certain business aspect that you excel in? A weakness in your competition is one you can take advantage of and make your own.
Nail your Elevator Pitch
We have previously emphasised the importance of having a pitch ready for investors, but we’ll repeat it because repetition is vital. An elevator pitch is a much shorter version of a normal pitch, anywhere between 30-60 seconds, and captures the essence of your brand. Have your elevator pitch ready and practiced, as you never know when your golden opportunity will arrive.
Know what Investors Look for
There are several important aspects of a start-up that investors emphasise. Not only do you need the essential tools and research completed, but you also need to know every single angle of your business plan; your market, target audience, financial plan and long term goals are among a few areas that you need to familiarise yourself with.
Additional tip: don’t forget to read up on the investors you aim to pitch for. Knowing their background story means you will be able to align your business accordingly, increasing the changes of receiving a positive reception.
Find your X Factor
At times, there is an unexplained factor that creates a passionate interest between an investor and a certain business or product. Whether it may be likeability, a mere instinct or a grand impression, it pays off to be authentic and credible in your presentation. Leave the sales personality at home and speak from the heart, connecting with the investor on an emotional level.