Are you at the point where you are thinking about how to come up with an investor worthy business?
There are a lot of myths and misconceptions about startups and getting funded. Some seem to raise enormous amounts of money almost effortlessly. Even without a novel business idea or a great model or product.
Others find it incredibly frustrating that their genius and much-needed startup idea doesn’t attract the investment capital they expected. So, what do you really need to come up with an investor-worthy business?
It’s Got To Be Really Big
Startup investors are looking for really big paydays. Their own business models dictate they seek out 100x returns. That’s how much bigger the payday needs to be than all the money you will need to raise (and you’ll probably need to raise a lot more than you think).
You can’t just pick a number out of the sky either. You need some good data points to back up your claims too. Make sure you know your market and that the problem you are solving and the product you are providing really has that huge potential.
A Great Story
This is one of the key aspects of how to come up with an investor worthy business. Especially if you are at an early stage. A business that is highly attractive to investors isn’t just one with good facts and figures. It isn’t even one with a perfect product.
You also have to have a compelling story. In fact, storytelling may be the number one superpower you need to turn whatever your idea is into a venture that is magnetic to investors and a fundable startup. It just so happens that this skill is also key to securing customers and recruiting a great team and managing them well too.
In this regard, keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
It Is Presented Well
Knowing the best story to tell is a part of this, but so is a visual presentation, the art of delivering the pitch, and knowing the optimal words to use when you need to present in text and slides and can’t deliver it live. You can be a true genius and have technical mastery in product design, but find that has zero correlation to getting funded.
Put yourself in the shoes of an investor and consider what type of presentation is going to get and keep their attention and warrant a check. Utilize our proven free business templates and be sure you are presenting the facts in the right order too.
Assemble The Right Team
For experienced investors, the team is far more important than anything else. Keep this in mind when addressing how to come up with an investor worthy business. The strategies will probably change. The product may well completely change. The business plan will certainly change. What matters is having the right team that can deliver on whatever this ends up morphs into being.
What’s the right team? One that is committed and flexible is certainly important. The best answer is having the best team to deliver on this business idea. The best team in this space will win. Credibility and domain experience is big. Yet, you really need to be the best in every facet of the business to win.
For example, if you are in fintech, do you have the best finance minds, best technologist and software developers, best marketers in this space, and for every other role? What you don’t have in your founders you can add in advisors, executive hires, and department heads.
A Unique Advantage
Contrary to the common misconception, you don’t need a completely unique business and product idea. In fact, if you do, you may be too early. What you do need is a unique advantage. Something that makes you stand out from the crowd.
A competitive advantage that you can keep on excelling at. That thing that will make people choose to do business with you and protect your business from competitors. If you don’t know what yours is, then you may need to start rethinking your business idea from scratch.
In the video below I cover in detail how to evaluate a business idea.
Show That You Can Execute
All the plans and hype and possibilities will only get you so far so keep them aside when nailing how to come up with an investor worthy business. You have to show that you can actually execute and make things happen. Planning and talking about it doesn’t produce results. Plenty of people can talk a good game. Few ever actually take action and make things happen. Show that you are one of those. Create a set of tasks you can cross off and milestones that will demonstrate you can get results. Log all the traction you’ve been clocking up.
Structure & Organization
For professional angel investors, venture capital firms, and lenders this is a business. Being passionate and excited about big visions and missions is great, but the framework and foundation of a real business still has to be there.
Even if investors want to invest, the process of going through due diligence can be a complete nightmare if you aren’t organized. Having the right corporate structure and having your accounting and documents tight from the start can make a big difference in getting from interest to money in the bank.
Make Sure It Can Go Fast
Your business idea not only needs to be able to go really big, and be structured and executed on well, it also has to have the ability to go fast. The business may not fully mature for 10 years, but you’ve got to be achieving big things every year and be proving you can keep up a fast pace of growth every month.
Be Sure You’ve Got The Grit
Even if you check all of the other boxes on this list it doesn’t mean you are going to get a check from the first investor you talk with on the first meeting. It can take multiple meetings. It can take dozens and even hundreds of investor meetings to get that first check. A part of that is designed to make sure you have the grit to persevere through the challenges too.
Hopefully, this post gave you some perspective on how to come up with an investor worthy business.