What Investors Look For In A Business

Seeking an investor to fund your new business can be stressful. Here are a few tips as to what investors look for when evaluating whether to invest in a new company to better prepare you to pitch an idea to investors:

1. Financial performance. It is crucial that you are able to prove to potential investors that your company has excellent financial performance. Be prepared to answer questions about the financial stability of your company and ideas relating to potential areas of growth. Debt repayment plans should also be properly presented. Expect investors to evaluate the company’s revenue streams acquisition cost and turnover rates.
2. Experience. Investors don’t want to invest in your mistakes, instead they seek experienced entrepreneurs and management teams with a track record of performance in the industry. Most investors will research your credentials and areas of expertise and your passion and commitment should clearly be evident to inspire confidence in investors.
3. Uniqueness. Your company needs to be unique and you must prove to your investors that your market potential is big enough to make investing worthwhile. Investors look for features that distinguish your company from competitors such as intellectual property rights and distribution relationships.
4. Large market size. The larger and more stable your customer base is, the stronger competitive advantage you will have when pitching to investors. A larger and more stable customer base will serve as proof that your company has a great impact to its target market.

Investors look for a company that can grow quickly and manage its growth. Investors must see that the company can generate significant profits beyond the initial product idea with adequate financial projections and a plan to include multiple sources of revenue.

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