While the concept of a new business endeavor is critical, investors consider a number of other factors before deciding whether or not to support a startup. Here’s everything you need to know.
In India, the startup culture has grown significantly, and more investors are prepared to invest in new enterprises.
While the concept of a new business endeavor is critical, investors consider a number of other factors before deciding whether or not to support a startup.
Before approaching an investor, entrepreneurs seeking finance should keep the following points in mind:
a capable group
More than the startup’s idea and concept, the founding team members are the most significant factor for investors to consider. Investors must be satisfied that the team is capable of carrying out their plans or that they have the necessary skill sets.
The tuning, trust, and loyalty amongst team members are also visible to most mature investors. They want a rock-solid team if they’re going to invest in one. As a result, I strongly advise you to only work with people you can spend the rest of your life with. It’s the equivalent of seeking a spouse. You should avoid making hasty decisions.
Investors are also looking to see if you are financially responsible. They’ll deposit a large sum of money into your bank account for you to manage. You must have complete faith that you will not go rogue or suffer a heart attack as a result of seeing too much money in your bank account.
Request the appropriate quantity.
You’ll be amazed if I tell you about the number of startups I meet every day with fantastic business ideas but asking for the wrong amount of money as an investor and financial advisor to many affluent individuals.
It is riskier to ask for a less amount than it is to ask for more than you require. Founders must also pay themselves a good wage.
I believe that fancy revenue estimates of 3-5 years are a ruse. They aren’t proven to be right in more than 95% of the time. For a startup in its early stages, just a few people are capable of doing it correctly.
So, in my opinion, having a correct plan is more advantageous than simply making estimates. An entrepreneur should be more concerned with the question of “How will we accomplish the goal revenue?” rather than “We have xxx revenue predictions for the next 5 years, and we’ll be billionaires in 3 years.”
Scalability and monetization strategy
You should have a good notion of how you’ll monetize your service. Personally, I don’t invest in startups when there is no need for the product you’re selling and you’re quietly turning people into your primary product.
They say data is king. Companies that do this are extremely successful, and I am one of their customers (or you can call me a product for them). The clearly specified monetization approach appeals to the majority of investors.
You must determine whether or not your product is commercially viable and whether or not people are willing to pay for it. The best thing you can do is get out of your room and ask strangers about it.