Many ideas have a chance of becoming profitable products through startups; in the case of technologies and their possible applications, this is fertile ground for developing initial prototypes and getting them out to a mass market. Knowing what investors look for in startups is an important step that can be the start of small and medium enterprises, which in turn can become larger projects.
What exactly is a startup?
A startup is the seed of a venture, although getting full support requires a minimum structure to draw the attention of potential investors. Steve Blank, a great entrepreneur of Silicon Valley defines it as “…a temporary organisation in search of a scalable and replicable model business.“
This indicates that its existence is temporary which only occurs to develop a product, usually technological and should preferably materialise in the existence of a company that reproduces on a larger scale. It must be profitable and likely to remain so over time.
The investment sector in startups is reduced because it’s a promising field but risky. Therefore, it’s essential to use all the help and all the luck to come to get the necessary support. For this, entrepreneurs must have a clear development of the central idea and the clear ability to show the full potential of what should be something really innovative.
What do investors look for in startups?
In reduced opportunities you can get support for the initial development of a product. To succeed in a presentation which triggers a startup, you have to know what it is these investors seek.
Thorough knowledge of the field must be demonstrated and the potential possibilities for production. The following are vital qualities to show in order to obtain the money or support of these investors.
The product and the needs it satisfies
To understand the characteristics of the product to be developed, it’s important to initiate or make clear what needs it satisfies or covers. After all, some of the easiest and simplest things in the world have multiplied universally due to the universal utility they represent.
Another feature that should be reflected in the presentation is that the product is innovative and creative, which is the seed of its success. These investors have possibly seen other projects and may have already reviewed an idea to meet the same requirement; but they will be inclined to favour the one who presents in the most original way possible.
The head of the project must have all the virtues of an entrepreneur. They must be a person with good ideas and have appropriate training. But they must also show signs of being willing to completely get down with the work this involves.
Entrepreneurship is promising but the most challenging task there is. You must know what problems may be experienced along the way and learn to solve them to reach a satisfactory conclusion. A person with experience or credentials having developed this activity, knows how to stay on track, persisting in their goals with dedication.
A team of specialists
While leadership of the project is important, it cannot be a single person, like Don Quixote against the windmills. You must have a team of professionals who are internalised with the product and who have been involved in its preliminary stages.
A team must cover the various aspects of the product with knowledge of its strengths and weaknesses. These must be the basis for future improvements which are also the beginning for its successful reproduction.
Both the business leader and the accompanying team must also be clear on the level of risk, considering the variable prevailing economics. There must be a balance between potencial problems and expectations in order to achieve a realistic picture.
Prototype or pre-production
Given that this is a risky investment, you must show a prototype or model of the product of interest. It’s one of the most telling aspects of the project as it makes the potential for innovation and its applications clear.
You should also show experience on a smaller scale pre-production. The results should reflect in an emphatic fashion profitability in the medium and long term.
A complete business plan
No matter how eloquent it may become, nothing is clearer than a full business plan to express in writing what has been said. In other words, this should be translated into numbers and earnings expectations, as these data must be to understand and convince the investor the need to support the startup.
Investors can only trust a businessman that has a complete business plan, otherwise they will not even consider the proposal. Therefore, this business plan should reflect everything from the function it fulfills, to necessary operational and overhead costs for its effective implementation.
Secrets to a successful business presentation
Having a complete plan for the project and all that it entails, a fundamental part of the process is knowing how to coherently present it to potential investors. Keep in mind that attention is powerfully captured in the first five minutes, so you have to choose carefully what will be said.
So, below are some basic tips for a successful business presentation:
Making the project credible is one of the first points that should be set before giving any other information on it. This is accomplished in part by clearly exposing the subject, but much more by introducing to those present about previous experience in the activity.
Do not read out a CV. You can start with a short story, perhaps an anecdote that illustrates how you previously worked in this area.
Use of audiovisual material
Por suerte en la era digital es fácil realizar una presentación de diapositivas de Power Point descriptiva con los puntos principales de la exposición. Es un recurso que no hay que dejar de lado.
Un video que sirva para comprender el tema, también es bienvenido. Y si se va a recurrir a material impreso, hay que procurar que sea claro, conciso y que todos los presentes tengan una copia que puedan ver personalmente.
Answering difficult questions
If one of the potential investors has a skeptical position on what has been spoken about, rather than going into a panic it must be seen as an opportunity.
So, their questions will be difficult and a real concern for the presentation. At that moment you must devote to convincing this person, because if they change their mind, those more favourable will have no doubt about the viability of the project.
Thus, it is clear what investors are looking for in startups. It’s about being clear in everything that involves the development of a product, emphasising the utility it will have for the public. A complete presentation is a fundamental step to pave the way and win the support that can enhance your business.