What are Investors looking for?

This may include something as intangible as a feeling about a business concept – maybe they are having a good day and are feeling generous, or a pitch taps into a childhood passion of theirs. Perhaps the person pitching to them comes across fantastically well, and despite not loving the business, they get a feeling that they could really work with the entrepreneur.

None of these, or a million other reasons why they might invest in your business, are within your control, but to help improve your chances of getting an investor on board, here are my top points to take note of that investors look for:

Your Commitment
How committed have you been to the venture so far? Investors will want to know how much you have personally invested into the business; this can be in financial terms but also blood, sweat and tears. This is a great opportunity to show your passion for the business and that you won’t just give up without a fight. You need to be able to show a genuine commitment and strength that proves to an investor that you’re determined to make this thing happen.

A Unique & Distinct USP
You may think your business is something special, but proving that to a potential investor could be a challenge. What differentiates you from the competition? You need to show that you either have something totally new or a new way of approaching an established and profitable business. Investors don’t want to hear the same old idea that they’ve already heard a million times before, so before you pitch, consider exactly what makes your business different and unique in the market, and why it’s a must-have service or product to potential customers.

Market & Competition
You might have a brand new and unique idea, but what’s stopping others doing the same, or established players expanding into your area? Patents, trademarks, specialised skills and the expense of setting up are all factors that can stop or at least slow competitors entering your market. Potential investors will be interested in hearing exactly why it would be difficult for someone else to simply come along and offer what you are doing better and more cheaply than you can.

Track Record
Do you have an experience or expertise in running this kind of business, or any kind of business? Investors will want to know what you’ve done previously, whether you have any relevant employment history and what your knowledge of the market you will be entering is. They will be well aware that there is more chance of success if you have the relevant skills and experience to launch, run and develop the business you are asking them to fund. This is not to say that if you have a fantastic business idea but no experience you won’t find another way of convincing them to part with their money, especially if they have expertise and knowledge in the field that they feel they could add to your venture.

Profit Potential
You might have a winning USP, tonnes of relevant experience and think you have the investor wrapped around your little finger, but will the business actually make any money? This is one thing investors will definitely want to know. Profitability has as much to do with pricing structure, production issues and delivery, as it does with demand so make sure you absolutely know your figures. If you’re stumbling over the numbers, potential investors could easily lose confidence in you so make sure you don’t lose them over this

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Bill Morrow

About Bill Morrow

Serial entrepreneur, Bill Morrow, has been creating, building and selling businesses for the last 25 years. He is CEO & Co-Founder of Angels Den, the world’s first integrated angel funding and crowdfunding platform.