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.
Investors care about management, markets & also products. They invest in deals where they can own enough to make it worth their time. And all of this is wrapped up in forward progress that you demonstrate over time.
For funding organizations, it is important to know the market, the competition and the conditions under which your business is being launched. An already saturated market will require a risk-taking investor, if you need someone to fund your organizations. It is generally known that banks are reluctant to fund agriculturally related projects mainly because of the high risk involved in the farming process.
Some other factors include; industry- size; target audience, competitors and players, season- cyclical. The partner or bank will also like to know you are willing to bear the risk associated with going on with the business and the ne essary risk mitigation startegies you have in place.
9. Capacity to repay:
This is the primary interest for most institutions that may require interest on your paying back terms. How long it will take for to recoup money invested is also a consideration.