Funded

Chapter 5. What Investors Are Looking For

This part of the book will prepare you to hit the fundraising trail, building the toolkit you’ll need to successfully pitch investors.

What’s in that toolkit? You’ll need a solid pitch, which is made up of your online brand, elevator pitch, and pitch deck. And you’ll need to prepare all the financial and legal information an investor might ask for when evaluating you as an investment opportunity.

But before you can create your toolkit, we need to explore what investors look for in the early-stage investment opportunities they pursue.

Early in the life of your company you won’t have a lot of data. There will not be a long track record that investors can review and analyze. Without data, early-stage investors have to make decisions based on “softer” attributes, such as your team, your market, or your product. When your company is further along, you’ll be expected to have much more data that will enable investors to conduct a much deeper analysis of your metrics and traction.

Here are four main factors investors consider when evaluating early-stage investment opportunities:

Team

Are you the right team to tackle this problem? Are you the team that is going to win?

Market

How big is the market? How badly does it need a solution to the problem you are tackling?

Product

What have you built? How far along is it? How does it compare to similar products currently in the market?

Traction

How are you performing on your key growth metrics? ...