What do we recommend investors to look for before investing?
In the current innovative context, launching a startup is certainly not easy and full of obstacles. At inlea, we visit many entrepreneurs that have very good and disruptive ideas. However, lack of experience and cash flow problems are the main factors that can lead a startup to close in its first years of life.
Based on our experience, we recommend the following 5 key factors to attract the capital investment necessary to take off:
1. THE MARKET
It all starts with the situation of the startup’s target market. The actual situation and the potential one. Growth of this market will be what investors will look for first.
2. THE VALUE PROPOSITION
Investors will need to assess the viability of your project with real data, so the entrepreneur must have all the necessary evidence to demonstrate its value proposition in the market. The common first investor’s question is: what is your added value? Your business strategy must be clear about what differentiates it from the competition and why customers will buy from you.
3. THE TECHNOLOGY
Inlea believes that technology opens the doors for new markets, new partnerships and new clients. In addition, the technology facilities the business scalability and attracts the smart money, because it identifies the right time-to-market. In the event that the technology is totally new, the specification of the qualities and advantages of the product or service will be even important, as well as the reception by your target audience.
4. THE TEAM
It is evident that a company does not grow alone without a team behind it. The team must be ambitious, complementary, resilient, persistent, communicative, and respectful of leadership and roles.
5. THE WELL-IDENTIFIED RISKS
A successful investor is quick to spot risks to the startup’s value proposition and checks whether the team has identified them and has worked or is working to manage, reduce or eliminate them. Well-identified risks help the startup to focus its efforts, and therefore reduce the timing of its plan and time-to-market.
6. THE EXIT
The investor wants to recover his/her investment, so he/she will want to exit. Exits are diverse and depend on the size and characteristics of the investor. The successful investor identifies what growth the startup should have in order for larger investors or buyers of the startup to identify it quickly. Therefore, the investor expects the team to have a plan of action adjusted to the timing and momentum of the market, so that his investment is not lost.
From our experiences at inlea, we can take many stories and conclusions, in the end each company has different needs and goals. However, if all of these have something in common, it is that for a startup to be able to access investment and succeed, it needs guidance and professional experience to choose the right path to follow.