Top 3 Things Investors Look for in a Startup Founder

Photo by Mathieu Stern on Unsplash

You have that million-dollar business idea, but before you hit the million-dollar mark, you may need help from people who are also looking to help with such grand ideas. Whether you seek aid from angel investors, venture capitalists, or banks, you must prepare extensively before you start knocking on their doors. And what better way to prepare than learn about what they usually look for in a startup founder? Read on to find out the 3 top things.

1. Financial planning

While helping your business take off the ground is a motivation for the investors, they expect a return on their investment. So, you need to be prepared with the numbers. Check the data and decide if you are starting with enough capital to cover the initial cost to meet the current short-term goals of the company. Calculate precisely what amount you need and how you will spend it.
It involves having a transparent financial strategy for the stakeholders. How will they get their money back, and what is the projected return on investment (ROI)? If the numbers are too low, investors will lose interest, and if it is too high, it may seem unrealistic. It is always advisable to present accurate figures without embellishment. Furthermore, ensure you have laid down an explicit exit strategy, so the investors know how they can get their money back once the profit starts rolling in.

2. Product uniqueness

Why should people buy your product? This is one of the most fundamental questions you will be asked as an entrepreneur time and again. You need to narrate your product’s novelty to the investors as well. Everything new and shiny has a particular appeal, making it a must-have item for everyone.
This does not mean you need to invent an entirely new concept or product. But it needs to have some unique aspects. When you can successfully address an issue your customers face, it gives you an edge over your competitors. For instance, a yoga studio where people have no access to fitness centers can be profitable due to less competition.

3. Execution speed

The perfect idea is the starting point of your business journey. How you execute it will build the road to success. So, investors must understand whether you are ready to execute your plan to perfection. Instead of being fixated on the idea, you are expected to be fixated on the implementation.
It may not be easy to demonstrate if you can follow through with your idea when you are just starting. But even then, it becomes apparent by checking how meticulously you have planned the next phases. If you do not have solid production, finance, marketing, or sales strategies in place, that gives the impression that you are not ready yet.

Even if you have a small enterprise that does not need any investment from outside, you should look at these things to ensure you have a clear understanding of where your business stands. You will have to take care of multiple other things while managing your own company, but not taking care of these 3 can significantly affect the growth of your business. So, evaluate these 3 top things investors look for in a startup founder to ensure your business is on the right path.

Found this helpful? Listen to my podcast Figuring Out for more such content.

Follow me and my content on other social media handles:
Instagram | LinkedIn | Twitter | YouTube | Facebook | Buzzsprout | Spotify | Apple | Google



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Raj Shamani

Raj Shamani


200+Speeches in 26+Countries on Financial Freedom Investor: Startups, Stocks & Crypto