Today I thought we’d take a look and consider the 5 main things investors are looking for in young entrepreneurs.
I’m more looking at it from a social point of view. Its pretty clear that investors will also like to see that the entrepreneur has a clear vision for his or her project, good financial planning abilities and some degree of customer awareness.
But lets look at it from an idea and social perspective!
Here are the top 5
1. A great idea that the investor can see a healthy return on investment from and matches their portfolio
Number 1 relates to the investor being able to visualise the path the project may take, from product concept, to production, marketing and eventual product sale. An investor will want to be able to visualise the product/service being developed in the market. They will want to get a sense that the product will sell and see profit from the sale.
They want to be able to visualise you the entrepreneur at the helm of the business driving the project to success.
They want to be confident that their investment is likely to get a good return and just importantly qualify that this project will fit in along side their other projects. If they are in the milk marketing business, they are unlikely to want to invest in a social networking project and if they do, do you the entrepreneur really feel that comfortable having this type of investor as part of your business?
2. Someone who is committed to the project
An investor will want to get a sense of whether you, the entrepreneur are likely to stay with the project in the short to mid term, or simply run off into the wilderness when the going gets tough, leaving them with a business and nobody to manage it.
3. Someone who is easy to get on with
An investor will want to get a sense of whether you are someone they can work with. They need to feel confident that you are able to communicate with them effectively and that you are a likeable individual. It doesn’t always matter that you are not the best communicator so long as what you say is sincere and makes sense. Investors use their intuition to know who will be easy to get on with and who will be an absolute nightmare.
4. Someone who is honest and trustworthy
This is quite obvious really. if you are a villain or unscrupulous, don’t bother trying to engage an investor. Most will not give you the time of day and most can spot a phoney.
5. Someone who has a high degree of respect for the investors own contribution
As a new start-up you are likely to be speaking to investors who are investing their own private money in your venture. This money is usually money they have earn’t somehow, either by the investor taking risks, or by the investor working long hours to make this money. It’s important therefore that you the entrepreneur understand this and show the investor you are not spending their money without due care and attention.
I hope this gives you the entrepreneur some idea of how to approach investors and what you will need to do to reassure them you are someone they can good business with.
Best of luck with your ventures.