Startup investors look to maximize their returns by investing in companies. They receive dozens of applications each day, and choosing the correct startup isn’t an easy task. That’s why everything from your business plan, goals, unique selling proposition, and pitch meeting should be perfect. It will enable your startup to secure funding and step up on the growth ladder. You need to know what do investors look for in a startup to get their attention.

How much funding does your company need?

Funding is different for each company. It would depend on your industry, the product, your growth stage, and market share to decide an optimal amount. Your goal shouldn’t be to get the maximum amount of money but to secure what you need.

There are several rounds of funding that a business goes through. From the seed investment to the series, your goal should be only to procure what would help you survive. So, find an accurate balance where you can get enough money without giving away a large sum of your equity.

Types of investment sources

Before knowing what does an investor look for in a startup, you should look for the best source of funds. Here are the top ones:

  • Bootstrapping: Using your own money or savings to run your business is called Bootstrapping.
  • Bank loan: You can also get funding by a bank loan. It will require you to submit the business plan and other details for approval.
  • Angel Investors: Angel investors are often individuals who invest in the risky stages of a startup. They also provide guidance and technical assistance.
  • Venture Capitalist: VC firms invest in companies that are already past their initial stages and show progress.

What do investors look for in a startup?

Here are eight things that would answer what do angel investors look for:

  • A solid business plan is the driving force of any company. Investors would always want to look at your plan to see if it’s a viable investment.
  • Investors will undoubtedly want to fund your business if you have a growing consumer base. An efficient product-market fit will help you in that.
  • You should have a minimum viable product to attract an investor’s attention. It will help them recognize whether the market is interested in your products or not.
  • Your business will be an attractive investment option if you’re targeting a larger market. So, optimize your product to fulfill the needs of a larger audience.
  • Your business should be different and have a unique selling point. Tell the investors why your product is unique and distinct from the competition.
  • You should build momentum and traction about your product or company to attract an investor. It would help them differentiate your pitch from the others.
  • The company’s leadership should be skilled and able to handle the business. It will ensure the investors that their money is in good hands.
  • You should always include an exit strategy in your pitch. Tell the investors about the potential return, the timeline, their investment period.

This guide will enable you to optimize your business, the product, pitch, and strategy for attracting an investor. So, get to work now and secure that funding.

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