What factors are considered by the Investors to Invest in Start-Up?

 What factors are considered by the Investors to Invest in Start-Up?

Different investors use different criteria to judge an investment. The importance of these factors would wary depending on the stage of investment, sector of start-up, management team, etc. Listed below are typical investment criteria used by investors:

1. Market Landscape: Refers to the addressable market which the start-up is catering to.

2. Scalability and Sustainability: Start-ups should showcase the potential upscale in the near future, a sustainable and stable business plan.

3. Objective and Problem Solving: The offering of the start-ups should be differentiated to solve a unique customer problem or to meet customer needs. Ideas or products that are patented showcase deemed potential in the start-ups.

4. Customers & Suppliers: Laying out your customers and suppliers, helps investors understand your business better.

5. Competitive Analysis: A true picture of competition and other players in the market working on similar things should be highlighted. There can never be an apple to apple comparison, but highlighting the service or product offerings of similar players in the industry is important

6. Sales and Marketing: No matter how good your product or service may be, but if it does not find any end-use, there is no good.

7. Financial Assessment: The detailed business model that showcases the cash inflows over the years, investments required, key milestones, break-even point, and growth rates should be made out well.

8. Exit AvenuesA start-ups showcasing potential future acquirers or alliance partners become a valuable decision parameter for the investor  

9. Management and Team: The execution and passion of the founder and the management team to drive the company are equally crucial in addition to all the factors mentioned above

 For more info visit https://www.startupindia.gov.in/content/sih/en/about_us/faqs.html

 

 

thevcstories

https://thevcstories.com

We manifest the entrepreneurial and startup ecosystem for enthusiastic entrepreneurs by helping them build their entrepreneurial skills and encouraging them in job creation rather than finding ones. These episodes aim to provide much-needed guidance & motivation among the youth and bridge the knowledge gap.

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