The process of startup funding
Before we dive into the process of funding, let us understand what investors look for before investing.
- Idea and its potential
The starting point for every entrepreneurial activity is definitely the idea and its possibilities. The idea must be SMART, meaning Specific, Measurable, Achievable, Realistic and anchored within a Time Frame.
- Business
Investors also focus on the business including the credibility of the core team and their ability to execute the idea. Considered as equally important is the business model and revenue model along with your positioning, pricing, and cost structures.
- Future potential
Investors do not only focus on the present but also the future potential of the business which can be showcased through a well-drafted business plan which includes the business strategies, the usage of funds, value proposition, and the exit strategy.
- Return on investment
Additionally, investors look for the return on investment. It is important that the investors feel confident in the investment proposition and are convinced that they will be able to earn their investment back.