What Investors Look for in Startups

As a startup, seeking out investors and asking for funds can be very stressful. However, startups need investors to provide the amount of funding necessary to scale the business. That is why finding investors to potentially partner with is a crucial step early on in the companies life. However, that is not always an easy task. Not only do you need to find the contacts, but you also need to understand how to approach an investor when asking for funding.

At Cloudshadow, our team has gone through this process many times in our careers, which is why we are trying to make it easier for startups. Through our venture resources model, we are willing to provide funding and professional services in exchange for equity. If that sounds interesting, read on for some tips about what investors like us look for in startups.

What do Investors Look for in Startups?

Investors look for a few key things from startups before investing. Make sure you’re prepared to deliver what they need.

Momentum– See investors as early as possible. Chances are, many others will be competing for their capital. If you get to them first, you’ll reap the benefits.

Well-defined model and business plan – This is crucial for the success of any business. A business plan will outline everything about the business itself, from the demographic you plan to serve, to a complete market analysis. It will also discuss financials and projections. Do not even think about talking to investors without one.

Capabilities and experience – investors want to know what makes your team well-positioned to build your business and become a market leader. Business owners should really sell their abilities, without misrepresenting them. You’ll want to tell investors what makes your product different, even if it has a great deal of competition. Investors will want to see that you are capable of handling your business and running it effectively.

X-Factor – That certain thing that you have, that others don’t. Maybe an investor can’t quite put their finger on it, but it’s the thing that sets your product apart from everyone else.

Market size – Investors want entrepreneurs to do their homework. It’s critical to understand the market you’re dealing with, the patterns of business, and the level of saturation. Don’t let levels of saturation deter you, however. Companies can succeed even in a flooded market space if they get their strategy correct.

Apply For Startup Funding with Cloudshadow

We invite interested entrepreneurs to submit business plans to apply for startup funding from Cloudshadow. Contact our team if you are interested.

2019-05-24T09:20:29+00:00