Your essential investor checklist

Posted on October 21st, 2014
Business Skills & Planning

Your essential investor checklistFor most startups, finding investors to help secure funding is often one of the last options they consider after crowd-funding, bank loans and even bootstrapping. This need not be the case.
Investors – venture capitalists and angel groups –  not only offer much needed funds, but if you find the right backer, can provide guidance and valuable contacts.
Therefore it’s crucial that you ensure that the investors you approach sees potential both in you and your business venture.
Here is our checklist of what you need to do before pitching to that all-important investor.
Business plan
It is crucial that startups have an idea about where they’re headed. According to angel group, Angel Hub, investors want to see a solid business plan that includes monetisation and scalability, as well as a viable exit strategy. Be transparent and upfront about the measured amount of risk in your business plan.
Go live before you pitch
Although you can approach investors with just a business plan, and may even get them interested in the project before it’s launched, it is usually more difficult to raise funds on an idea alone. It’s always a good idea to develop the basic idea and make it operational before you approach potential investor so you have something tangible to show them.
Show your experience
Investors want to know the entrepreneur’s background, and whether the team has the ability to execute the plan and make the business a success. Entrepreneurs with startup experience and a solid background in the relevant sector will get preference over those with great proposals, but no credentials.

“Rejection should not be equated with failure”

Do your research
There are angel investing groups that focus on specific markets and industries such as women-owned, or tech companies, therefore approach investors who specialise in your particular field. A targeted and personal pitch would be more effective when approaching these types of investors.
Prepare for rejection
According to statistics from Microsoft Ventures, for every four businesses that appear interesting, two or three are actually rejected. Rejection should not be seen as failure, but rather as feedback. And don’t forget, most venture capitalists are open to candidates returning to them with a modified or even a different idea.