We would love to tell you that locking down an initial investment is the hardest part about running a startup, but the reality is far from that. In addition to continually seeking new investors for your startup, you must constantly ensure that current ones are happy so that they want to continue participating in future rounds.
It’s important to spend the time building your company in a way that attracts investors and showcases a positive outlook for existing ones. How do you do that? Just read our tips:
Differentiate Your Company
As your startup grows, you will realize that investors care equally as much about your product or solution as they do about you, your team, and your experience. Since investors put a lot of money on the line, they want to be sure that their money will not be used to fund your mistakes. That is why they vet the company founder or partners before investing, to ensure that they have experience managing and leading teams.
As you enter a new investment round, bring your experience and unique advantage to the forefront. Showcase how your experience, which is unique to you, qualifies you to lead your company to success better than anyone else.
Show How Your Product is Special
After you’ve impressed investors with stellar experience that makes you an expert in your domain, it’s time to show them that you have an excellent product.Show investors a clever approach to an unsolved problem Click To Tweet
This is really where your idea and it’s ability to take a bite out of the market gains importance. If you have a product that is inherently unique from anything else in the market, argue your case for a new trend in the current vertical, showing that your product is the market leader. If your product simply does something better or offers a new twist on an existing solution, push that solution and show why it is in fact better. Investors don’t always want to see something that has never been done before, in fact, they prefer something that is a better approach than current solutions on the market.
Brag about Your Business Model
If the startup world teaches us anything, it’s that a great team and excellent product are not always enough – you need to have an effective business model that will take your product to the next level.
It is important to showcase a unique business model that takes into consideration your advantage as a team and your products differentiating factor. Understand the business model you are currently working on, ensure it meets your needs and positions you for success, and take the time to focus on how you want to pivot that model in the future as your demand increases and your company grows.
Harp on Growth Potential
Investors typically examine your product as it connects to the marketplace as a whole, since a great product in a tiny market is as ineffective to them as a terrible product in a huge market. Investors will therefore be more inclined to invest in your company if they believe that there is a large potential market for your product and you are positioned to come in and take a sizable portion of it. It is a simple numbers game – the more potential clients you have, the more potential revenue you can generate.It's a numbers game – the more potential clients you have, the more potential revenue you can generate Click To Tweet
The Key – Ability to Scale
At the end of the day, investors want to see potential for growth. Having a great team, unique product, effective business model, large potential market and early signs of traction are all great ways to continue growth, but the journey never ends. As your product grows, it will become increasingly important to scale.
Consider working with a single or several enterprises on Proof-of-Concepts (PoCs) to leverage their numbers and showcase the effectiveness of your product in their ecosystem (if you need help finding the right enterprise, you can always contact a prooV member and we will be glad to help!).
At the end of the day remember your passion – it may be cliche, but it does make a difference in your ability to take your company to the next level.