What Investors Look For Before Funding Your Business

May 30, 2018

 
 
 
 
 
 
 
 
 
 
Funding in necessary to scale your business especially if your scaling the business towards a million dollars. There are several ways to fund your business but most entrepreneurs are unaware of what investors are looking for when funding a business.  Here are a few things to keep in mind when seeking funding from investors:
 
Your team

Investors want to see what your team looks like before investing money. Ideas are a dime a dozen. Even if an idea is unique and revolutionary at its inception, without graft and application it counts for nothing- plus, copycats are always around the corner. That’s why the backbone of any successful business is not its idea but the team putting that idea into practice. Your leadership is very important, 

According to legendary Silicon Valley venture capitalist, this starts with you as the boss: "When you’re talking to me in the first minute, I’m thinking- is this person a leader?" And investors extends this notion when bringing others on board as well: When you start a company, you have to go find somebody as good or better than you to be the co-founder so leadership is very important.

 

But it’s not just about hiring impressive individuals. Investors want to see a cohesive, engaged and passionate team in action. Essentially you and your management team have to tick several boxes. Firstly, you must be talented. Next, investors want to see open and transparent lines of communication. As recently reported by Project Management Institute, poor communication results in project failure in one third of cases. Communication doesn’t just occur, it must be worked at. In an article in Management Decision titled Transmitting the entrepreneurial spirit to the work team it was noted that, "A leadership based on relationships shows a positive impact, with an intensity of more than double that of participative leadership. A task-oriented leadership style reduces the chances of transmitting the entrepreneurial spirit to the work team."

 

 

Revenue Potential

This may seem incredibly obvious, but you would be surprised at how often it is overlooked. Against the backdrop of the phenomenal success of businesses like Facebook, Twitter and Pinterest being valued at hundreds of millions of dollars without a revenue stream in sight, many entrepreneurs are now being dangerously lulled into believing that this is the norm. These companies are very much the exception that proves the rule. And there also appears to be a school of thought gaining traction that the earlier you monetize an idea, the sooner you allow it to be judged by its revenue, rather than just the potential worth of the concept itself. If your idea has the potential to be the next Facebook, an eagle-eyed investor will spot it- revenue stream or not. Ready to get the most from your cleaning business? Sign-up for a free weekly dose of business resources to scale your business to the next level.

 

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