Investors meet with a lot of founders who are at different stages, with different business models and varied growth opportunities. However, what’s critical to all investors is the need for founders to have their business fundamentals in place before they meet. What are the business fundamentals which matter most to investors? Read on to find out.
Your Business Vision
Do you have a very short summary of what your business does and aims to achieve? Have you written it down, have you memorised it? This needs to be consistent and on point every time. Research and practice so you can learn how to explain your businesses “Why” and “How”.
The Problem & Solution
Next, what is the problem that you’ve discovered and who will you solve it for? Related to this is your solution: What is it? How does your business product or service solve the problem? If you have research, always quote or show that to back up your work. The problem and solution are critical areas to get right (For NCR Members, watch our Masterclass with Stephanie Ko from Gobi Partners to discuss how to make sure your product or service is essential and therefore has real opportunity to grow).
Business Model and Revenue Model
Many people think they are interchangeable. However, a business model explains the company’s strategy, operations and management tactics whereas the revenue model draws from these explanations to outline how the company will earn money. Our Masterclass expert, Andrew Barclay even has a list of 50 revenue model examples we can refer to.
Who is Your Competition?
Do you know your place in the market relative to your competitors? What does your product deliver that you feel is currently missing? Do your research and make sure this is true especially if you are talking to an investor from your industry.
When it comes to the team there is a lot of bias when it comes to women. With sole founders there are key person risk concerns so pre-empt that and think of the team you want to build. If you are using an investment to build the team, highlight any specific experience and skills of key team members that will be important to the business.
Your Investment Ask
How much money do you need and what will you do with it? One approach is to outline the milestones this funding should help you achieve including timing e.g. 24 months. Be as specific as possible.
Thanks for your blog, nice to read. Do not stop.