Startup funding: What do investors look for in a startup?
Q. How much will I get back and when?
Viable business model: The bottom line for any investor is return on investment. So he wants to know how soon and how much profit you can earn, and if you have a clear path and plan of achieving it. He wants a sharply focused business model, with realistic projections and estimates for revenue generation and profitability.
Q. Can you grow in a sustained manner?
Scalability & traction: No one wants to invest in a business that loses steam after the initial burst of profit and proof of viability. Investors want to see growth projection plans, and ability to continue and increase the momentum over the long term.
Q. Do you have skin in the game?
Passionate & focused team: For investors, a startup is only as good as its team. They want members with right credentials and expertise, ability to execute and deliver, and stay for the long term. They want founders to be fully invested, so excessive equity dilution in early stages is viewed negatively and will drive them away. They prefer more than one founder so that the startup can continue even if one member leaves or is incapacitated.
Q. Can you sell to your customers?
Market, size & strategy: Investors want a large market they are familiar with, targeted customers, and efficient marketing and distribution strategy to optimise growth. They also want to know if you can tap new market segments, add geographies, diversify portfolio and deliver.
Q. Can you outrun the competition?
Competitive edge: Even if the startup has a unique
