For a start-up looking at funding, be it seed, angel or even equity-based, it is critical to be ready for investment. This is necessary because not only does this help the new business get going with a head-start but it is also necessary for the entrepreneur to see how far his idea can convert to reality in the real practical sense. To get investors interested and ‘locked-in’, deliberating your investor-readiness quotient does make eminent sense.
So what is it that investors are trying to find out? Well, the primary concern of any investor is value. Value for his / her investment, value for one’s time and value for his / her own extended business food-chain. Just as each one of us is propelled by a variety of motivations to ‘start something great’, an investor is also seeking to either grow his or her own business, or wish to also help in helping others or just be remembered as somebody who caused big things to happen.
The essential factor for any start-up seeking investment is to get a document about their business direction and details together. This business plan is greatly augmented by having a viable proof of concept and some real market experience and dip-stick study. Apart from this, a professional management team or a leadership group is absolutely key for any investor who is seriously evaluating a business proposition involving term funding. It is also important for any start-up to know what the market looks like—both now and in the near and far future. Since an investor is looking at a long-term play, the traction that a start-up may have or will have in the market gives a great cue to how the post-ideation stage business will actually look like. Ergo, forecasting makes for better hedged investments. An USP is not only something that the investor is seeking to find out first-hand about you, it is also the life-line of your viability and a sustainable competitive business advantage. Be sure to have that defined, quantified and articulated at the earliest.
Being investor-ready also demands that you have a clear idea about your valuation, the legal and statutory framework of the markets that you are addressing, Also, commitment, flexibility, industry expertise and solid financial support proof-points are a collective persuader of investment in your start-up idea.
Being investor-ready is not just about getting ready with a smart and sharp elevator pitch. It is also not merely ideas and inspiration. Any start-up is a business. Remember, investors have a veritable plethora of options and hardly any time for a poor, ill-prepared proposal. To be among the top percentile of evaluated companies, you need to have the components of the investor-ready quotient well-oiled and sparkling on your shop window. In the forthcoming posts, we will help you get a deeper insight into the more crucial facets and components of what being investor-ready really is. Till then, plan well, execute better. Cheers!