What an investor wants to hear?
So they're going to want to know exactly why you need the cash and exactly what you plan to do with it. They'll also want to know when they can expect a return; that should be a part of your business plan. Investors will also be looking for an exit strategy, and you need to think about that in advance.
Investors want to know the size of the overall market and the total number of potential clients. The investor would hesitate to invest if the planned market size is insufficient since they might not receive sufficient profits. It must be remembered that the company should be sustained over the long term.
- There's No Such Thing as Average.
- Volatility Is the Toll We Pay to Invest.
- All About Time in the Market.
- A Market They Know And Understand. By choosing an industry they comprehend, investors reduce the risk of squandering their investment. ...
- Powerful Leadership Team. ...
- Investment Diversity. ...
- Scalability. ...
- Promising Financial Projections. ...
- Demonstrations Of Consumer Interest. ...
- Clear, Detailed Marketing Plan. ...
- Transparency.
Questions venture capitalists are guaranteed to ask
To answer that question, VCs will start by pressing you on these key areas: What problem is your company solving? What is unique or proprietary about your product or service? How large is the market for it?
- Research your investors.
- Prepare your pitch.
- Practice your delivery.
- Prepare for potential questions.
- Follow up after the meeting.
- Skip the small talk. What should you discuss after saying “hi” and briefly introducing yourself? ...
- Know your market. Is there a large market opportunity for your business? ...
- Be honest. You probably don't plan to lie to potential investors, or anyone else. ...
- Do your homework.
Trade-offs must be weighed and evaluated, and the costs of any investment must be contextualized. To help with this conversation, I like to frame fund expenses in terms of what I call the Four C's of Investment Costs: Capacity, Craftsmanship, Complexity, and Contribution.
- If you can't afford to invest yet, don't. It's true that starting to invest early can give your investments more time to grow over the long term. ...
- Set your investment expectations. ...
- Understand your investment. ...
- Diversify. ...
- Take a long-term view. ...
- Keep on top of your investments.
The 4% rule entails withdrawing up to 4% of your retirement in the first year, and subsequently withdrawing based on inflation. Some risks of the 4% rule include whims of the market, life expectancy, and changing tax rates. The rule may not hold up today, and other withdrawal strategies may work better for your needs.
What not to do as an investor?
- Overconcentration in individual stocks or sectors.
- Owning stocks you don't want.
- Failing to generate "tax alpha"
- Confusing risk tolerance for risk capacity.
- Paying too much for what you get.
- Innovation to the rescue.
- Understand an investor's mindset. ...
- Craft a compelling business plan. ...
- Build a strong team. ...
- Demonstrate market potential. ...
- Highlight key milestones. ...
- Leverage connections and networks. ...
- Conduct targeted outreach. ...
- Utilize angel networks and online platforms.
- Networking. ...
- Make a powerful pitch. ...
- Be confident and realistic. ...
- Emphasize the return on investment (ROI) ...
- Know your investor audience. ...
- Start somewhere. ...
- Small business loans. ...
- Understand your financial situation.
They will want to pressure test your ideas, your ability to think on your feet, and the depth of your business plan. Keep in mind that investors are always looking for reasons to not invest in you. In doing this, they are going to ask you tough questions. You need to be prepared for those questions.
- How does your company fit into the industry?
- What are the major obstacles to your success?
- How did you calculate the size of your market and its growth rate?
- What makes your company different?
- What value do you provide that is not already available to your customers?
A unique, well-thought, and viable business plan is what investors are looking for. They want to know that you're not overly optimistic and at least realistic about your company's future. They want to see that you both have a vision for your company and a strategy for achieving your objectives.
- Maintain Transparency To Build Trust. ...
- Let Each Investor Contribute From Their Area Of Expertise. ...
- Bring On An Independent Mediator. ...
- Set Clear Expectations From The Start. ...
- Show Genuine Interest And Acknowledgement. ...
- Treat Them Like People First.
- Understand Your Investment Goals and Time Horizon. ...
- Assess Your Risk Tolerance. ...
- Diversify Your Investment Portfolio. ...
- Avoid Trying to Time the Market. ...
- Educate Yourself and Seek Financial Advice. ...
- 2024 Tax Deadline: Mark Your Calendars for April 15.
It is crucial to have your complete pitch deck consisting of 10 to 20 slides, a condensed business plan, team resumes, and detailed financials that support your presentation. Furthermore, it is essential to ensure that your pitch deck highlights how the investor's funds will be allocated and why they are needed.
- Serial investor Magnus Kjøller receives more than 500 cases annually, and in many cases has founders an unrealistic view of their own business when they apply for capital. ...
- “It can't go wrong”
- "We have no competitors"
- "I need a director's salary"
- "We need capital - not your help"
What not to say to a potential investor?
- You Need to Sign This NDA. ...
- We Have No Competition. ...
- We Don't Really Know Our Unique Selling Proposition Yet. ...
- We Have No Weaknesses. ...
- This is Such a Sure Thing it Can't Fail. ...
- I Don't Have an Exit Strategy Yet. ...
- We Really Need the Money.
Stay Positive and Keep Updating: Politely ask if you can keep the investor updated on your progress, even if they've said no. This shows persistence and keeps the door open for future opportunities.
The typical American could replace their $40,480 annual income when they retire by investing $826,122 and living off a combination of savings interest and investment returns (assuming an average annual retirement return of 4.9%). This would cover retirement for many Americans, but it's not necessarily true for you.
- Align your risk with your goals. What are you investing for and how are you going to achieve it? ...
- Diversify. ...
- Rebalance. ...
- Watch out for leverage.
1 – Never lose money. Let's kick it off with some timeless advice from legendary investor Warren Buffett, who said “Rule No. 1 is never lose money.