They love your product/service, they think youll be great at the helm or they are convinced there is a gap in the market for your proposition etc. There are a few reasons that come up time and time again though and heres what they are:
They like you. Not only do they believe they will be able to get on with you, but more importantly – they trust you can do what you say ie bring the company to profitability.
Theres not much competition. The sector you’re seeking to break into doesnt pose much of a threat. As a result they believe there is a fair chance you really could be onto a winner.
Its their specialist industry. As I mentioned before, many investors prefer to put their money into an industry/sector with which theyre familiar.
you’re located nearby. Some individuals understandably like to keep a close eye on their investment. To be able to do this they need the company to be located within driving distance.
Precise costings. The value of your company, your sales projections, how many orders you currently have theyll want to know all these statistics and preferably on paper (ie not just from what you say).
A definite spending plan. What you’re going to actually do with the money whether youll be investing in staff, equipment, marketing etc.
Skills/talent quota. Who else will be working within your company and what skills do they bring to the table
Knowledge. Will you be looking for the investors expertise If so, will you take that into account when it comes to the cost of investing
Investors are individuals but chances are several bullet points from the list above will be crucial to the potential investor you’re about to go and meet.
Its always good to know where a funders concerns and interests lie and why they would be happy to hand over cash to a brand new venture. Its never going to be something that they undertake lightly.
Raj Dhonata is a serial entrepreneur and investor in startup businesses