It is very good to source for investors when starting a new business. However, one of the things you quickly discover is that you are not the only one with great and sound ideas; neither are you the only one who needs funding. Most people will, rather than developing the idea into a plan and strategy, they jump out looking for funds to finance the business. They then begin to complain that people or banks are not interested in helping businesses.
Investing in businesses for investors is not an easy task, especially for new businesses. They have to think about the risk related issues and long term investment factors before investing and that is why they prefer confident and adaptive start-ups. Listed down are some important factors that investors look for investing in: Ultimately, any investor would dig deep into a start-up and looks for the following factors before investing in any start-up.
This is most commonly called virtual capital. Your character is the capital that you have that guarantees that you can get cash even on the viability of your word. It is possible to conduct business, collect goods based on this tremendous goodwill you enjoyed or are enjoying. An investor who saw that at one time you borrowed money and have repaid within the specified time, assures the investor that he is safe.
Collateral is one factor that chases people out of banks. A collateral is an asset that you have put down as a guarantee to pay the money. Of course, if the time lapses and the money is not yet paid, after a while, the Investor may begin to look for a way to recoup his money by impounding and selling your assets.
12. Exit strategy
A robust exit strategy is essential in order to liquidate the investment. Investors want the start-ups to maintain the strategic exit plan right from the start including the time frame and optimizing it for an appropriate return.
All the best.