Your Gambit

Pitching to an investor or showcasing your business plan needs to be tailored similar to a sales pitch answering the questions of benefit for the investor and the consumers. As an entrepreneur your main reason to startup is profits and to capture the world markets, but unfortunately that can’t be your only pitch, can it?

To get any investment you need to understand the psychological views of the investors and pitch you business through their lens… Let’s ask ourselves if we were to invest what are the top 3 things we would look for?

Profits and Sales? Resale value or repeat customers? Growth plans and viability? OR a perfect blend of everything?

Here’s a list of what an Investor may look for:

Objectives and Problem Solving

As an entrepreneur with a product or service the value you give to your customers and clients matters the most to the investors. Because if you are solving a problem you’re most likely to stay in business as long as the problem exists.

Market size and TAM

The market size basically the potential demand for your product whereas total addressable market will be similar to a niche that you could start catering too. Investors are most likely to check ease of use, adoptability of your product, historical and forecasted market demand and your plan to target. They will most likely check the average ticket size of your product or service and if the same falls in affordably for your customers.

Scalability and Sustainability

A business cannot function on a flat line it would most obviously and inevitably lead to death. Scalability is basically growth plans, expansion and sales. Whereas sustainability is long-lasting, where the product you sell is durable as well the problem you solve is recurring enough with a growing demand.

Competitor Profiling and Research

There are two types of product/ business, it is either Innovative or it is either an extension of an exiting product. If your product is new and innovative, patent it so there’s no competitor entering your space. However if your product is an extension of an existing product figure your competitor at what stage they are on, what’s their market share, their USP, their GTM, their POS or distribution channels and figure their improvements and how quickly they could adapt to you entering their space, means the extension you’ve created how simply can it be incorporated and sold to their already existing consumer base. As an investor you’d definitely want to see stalker level research to understand the competition.

Suppliers and Customers

Suppliers and Customers are very important because you as an entrepreneur is a connecting link between them. You need to Identify which suppliers, international or local, Number of days in which they will expect their payments in short the purchase credit period versus who your clients and customers are and how likely are they to pay you on time in short Sales credit. If your purchase credit is 45 days your sale credit should ideally be 15 to 30 days, you need to get the income to be able to spend. This is also one of the reasons startups need funding to ease their Working capital requirements.

Financial Assessment

Financial assessment is usually done after the seed stage that is series A and so on, Financial assessment helps the investor understand how smart the entrepreneur is with their money.

Sales and Marketing Spends and organic attraction

Huge spends on sales and marketing in the starting stage of growth is important, however constant need to spend could indicate a huge demand gap for your product. Marketing helps create demand, sales help converting that demand, they are important for growth, and to be used as brand awareness and existence reminders. The product should matter more as the product with its feature should stick in the mind of the consumers and have its own NPS that gives an Organic Attraction. As an investor you would want to see where your money is going and what could be the expected ROI.

Management and team

Some investors keep a very close eye on team and founders, the passion, the enthusiasm, the culture the brand instills like the blood flowing through the veins that gives you an adrenaline rush. Most investors take their bet on the founders and the passion they have to solve a problem.

Exit Strategy

Like all good things come to an end find the exit door should also be in the plan, not for the founder but at least for the investor, it could be a merger, an acquisition, a buyback or and IPO. A founder’s choice of exit strategy is what could attract an investor to invest.