Key Things Investors Are Looking For In A Startup
It is a known fact that entrepreneurs bootstrap when starting out because of limited finance. This is one of the main reasons why less than 50% of them survive the first five years in the market. To take your startup to the next level, entrepreneurs are regularly searching for venture capitalist and investors to invest in their businesses. Of course, startup investors desire innovative companies to invest their monies. However, they won’t drop a dime if they do not see the following things highlighted by Jumia Travel, the leading online travel agency, in your startup.
To secure startup investor funding, show that you have smart, strategic, and successful leaders. You must show the competency of both your company founders and leadership team. So, endeavour to leverage your leadership team’s professional experience for increased investor interest in your startup.
Return on investment (ROI) is the time needed to recoup the initial expenses invested in a business. Most startups aim to achieve this within the first one year of operations, but in certain sectors, it takes considerably longer due to high entry costs and low-profit margins. Would-be investors are aware that quite a number of startups that receive venture funding are unable to immediately make returns. As such, they want to see some real evidence that within a particular period, they will begin to get these returns.
Consumer interest in your product
Investors want to know that your product has a future in the marketplace. So, the onus is on you to show them proof that it has a market niche of its own and consumers are interested in your product.
Transparency is important to increase investor trust in your business. No startup investor wants to enter a deal when they do not feel like they have all the facts. Be open and honest about the state of your business, the challenges you are facing and how you plan to surmount them.
Investors do not want a company that will be stagnant. They want to invest in startups that will thrive and eventually provide a return on their investment. Therefore, your business should be built with scalability and growth in mind.