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Why Should Someone Invest in Your Startup?

I was recently reading an article on Business on Main, 20 Funding Sources for Your Startup. It provided a few tips on how to pull together your proposal for funding, but also provided a number of great resources for seed stage funding. While certainly you need a plan for how you will ensure your business is going to be profitable so that investors can get a return on their investment in your business, consider some of the following other key areas that are of importance to investors. Be prepared to talk about any of these areas of your business when meeting with investors.

  • Uniqueness/differentiator: What about your product or service is unique and fills a need in the marketplace? How are you different than your competitors?
  • Commitment: Are you committed? What are you putting into the business yourself? It doesn’t have to be a significant investment, but something to show commitment.
  • Customers: Who are your customers? Why are they your customers?
  • Competitors: Who are your potential competitors?
  • Salary: How much salary will you and/or partners draw? Most investors don’t want to give you investment money that goes mainly to salaries.
  • Vision: What is your vision for your company?
  • Future: What are your future goals for the company? Investors want to see a plan for return on their investment.

Develop a strategic business plan before seeking investment monies. Have another person review your plan to ensure it makes sense. What questions do they have about it? What is missing from it?  Seek advice and guidance from the Small Business Administration’s website and SCORE’s website. You need to have a well thought-out business idea in order to begin to reach out to investors and talk to them about your idea.

Good luck!