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.
How much is required from them? Most times, most of us look out for huge amounts of money TO START the business whereas we do not need that huge amount of money; we only want to start the business from the top. Investors will also want to know how much you are willing to put into the business, especially if you do not have a cogent excuse to be indigent. Nobody will invest in an idea you are not willing to invest heavily in yourself.
5. Business Plan
Every investor seeks for a clear and comprehensive business plan of a start-up which illustrates that there is a market and scope to make a return. They closely study the details and presentations defining the business plan and consult their business valuation expert before finalizing their investment.
Most investors want to own between 20–25% minimum of your company. If they co-invest with somebody else that they consider important they might be willing to cut that back to 15%.