This post was written by Clinton Loomis, a writer and teacher.
An investor has to analyze quite a lot of things before finally making a decision to invest his money into a business.
On what basis will his decision be based? Here we have gathered fifteen such important points that an investor will definitely want himself to be assured about before making out any decision.
1. Financial Value.
The very first and most important thing the investor will look for in your proposal will be its financial value.
There are some projects that speak for themselves. As they are so powerful that they are sure to capture a great amount of market as soon as it is introduced. The investors will obviously want their money returned with bonuses. No one will ever like to sink away their money that they have earned with much labor.
2. Background of the Entrepreneur.
Since the investors will meet you for the first time, they will need to know everything about your background. Be prepared to answer questions related to your family and friends.
They will need to have this sense of satisfaction that you can be trusted with such a huge amount of money. For that they can even go for secretive enquiry about you from people who know you well.
3. Past Experience.
Maisie Acton, CEO at Coursework Club has expressed her feelings from the past that:
“Investors will need to know about your previous experiences as an entrepreneur or an employee. They will enquire you about your performances and judge how responsible you are on the basis of those records. Again, for this purpose, they will carry out a secret research from your previous company’s employees. After all, they want their money to go to someone who is experienced enough, not to someone who is naive to this field.”
4. Why Your Product Only?
You should be able to convince the investors fully about the uniqueness of the idea behind your product or service.
Compel them there is no better option for them where their investment will be most worthwhile. They will need to know what is so special about your product that others do not have.
The investors will take keen interest in knowing what strategies your company will be using to ensure increased profits in the long term. There should be an incentive for them to continue working with you in your future projects as well.
6. Competitiveness of Your Product.
The investors will want a product which either would not already be in the market. Or if it is there, then, it should not have much competition.
They will look for qualities in the product that are most in demand by a large group of market.
Along with the uniqueness, the investors will look for a proposal which is simple to understand. The more complex a product, the smaller its market. Normal people should get the purpose of the product very easily.
8. Current Progress.
Are you just good at conveying your message? Or are you able to put your words in action?
They will be highly impressed to see you have already taken some initiatives to establish your company. This will convince them of your seriousness towards your work.
This is perhaps the most important thing they will look for in an entrepreneur.
How clearly is he able to convey his proposal to them? If he is not sure of his goals himself, then what is the purpose of any further discussions?
Remember, you are the game changer. You can either put the investor into doubt whether to proceed with you or not. Or you can make him believe through your own strong belief, that your idea is the only best one to work with.
Investors will look for the element of curiosity.
The nature of a curious person goes a long way. He looks for newer ways to bring betterment to his plans and ideas and is always searching for more profitable strategies.
Remember, there is a very thin line between confidence and over confidence.
Make sure never to cross that line or else you will lose the investor forever. Show confidence in your product and own it.
Humbleness in nature attracts the investors since they want to work for long-term with you. If you are rigid, then it is going to create problems for both sides.
They can even test you to check how committed you are towards your work. They will notice it in your tiny gestures. Be mindful of the promises you make with them no matter how trivial they may sound.
15. Realistic Approach to Negotiations.
While negotiating, you should be sounding sensible, yet realistic. If you demand extremely high, then it shows you are greedy by nature and a little immature too.