I hope you enjoy reading this article.
If you want my team to cover your story, write us at [email protected]

VARSHA SHARMA, Co-Founder


12 Ways for investors to identify high-potential entrepreneurs

12 Ways for investors to identify high-potential entrepreneurs

Investors are constantly looking for the top entrepreneurs to invest in. Finding the right people can be challenging, as it requires a deep understanding of the market and extensive research.

The best strategies involve leveraging networks, resources, and knowledge to source potential startup opportunities. Investors must carefully analyze each company's business model, evaluate its scalability potential, and discern whether or not the venture has the staying power to succeed over time.

Successful investors also build strong relationships with entrepreneurs, so financiers and companies can both benefit from shared opportunities.

Entrepreneurs need smart investors just as much as savvy investors need innovative entrepreneurs; therefore trust is integral to these deals.

Both sides must conduct due diligence prior to investing any money into new projects so here are some strategies used by investors to procure the top entrepreneurs.

1) Have a different selling point of view 

If your business has a different selling point of view, investors will get to it automatically. Whether you’ve developed a quick, low-cost, or operate only organic or sustainable products.

If you can show them demand and profit (or future profit), you should be able to convince an investor to fund your business. A track record of profitable goods and services can help you gain credibility in this area.

2) Create a pitch

Describe your products in a few words and it should always provide knowledge in an interesting way. If you and the rest of your team consistently and successfully present your pitch you will build a buzz about what you’re doing everywhere you go in future. 

And if your business is a startup then not only will you find investors more straightforward, but investors may contact you before you’re ready.

3) Good team

Putting together a team of well-known professionals people in your team is an excellent method to attract investors and increase your chances of getting funded.

If you can demonstrate that they are dedicated to working for your business for at least the next several years and that the whole management team will be easy to deal with and help you to grow the business, you can also attract the investors to attract your business.

4) Corporate social responsibility & Sustainable

Today people are more into sustainable products or services. Basically having a sustainable business can help you to gain anyone's attention. Even in the case of investors increasing their search for businesses that commit to corporate social responsibility and sustainability. 

So you can demonstrate it by showing that you are taking steps to create a diverse workforce, that you are constantly trying to reduce their environmental impact and make them more sustainable, that you are helping in creating new jobs for the local economy, and that you are working to support the local community and doing charity. 

5) Provide ownership in your company

Investors commit time, money, and effort to a company in the hopes of seeing a good return on their investment. You must be prepared to offer a good pitch to investors so that they will take a fair interest in your company when they are ready to finance you. 

A good pitch should be interesting and grow the profits, such as after four to seven years, they see a significant return on their investment.

So here you can not only ask for financial help but you may ask for it in exchange for a share in your firm. You may also request to use your investor’s expertise, experience and time. 

6) Making a list of concerns

Making a list of concerns is one way to boost your confidence and help investors invest in your firm. Consider all of the reasons why they would not want to invest in your company where things can go wrong. 

Then, go over the list and find responses or answers to the concerns and be prepared for any inquiries and circumstances that will allow you to reply effectively at the moment. 

Also, your confidence and preparation to implement your plan will make them more likely to invest in your company.

7) Building your network

The investors will want to see that you have a network of people surrounded by you who can help you achieve your goals & aim. 

They want to know that you are building relationships with other entrepreneurs in the market, and they are looking for people who can give advice, guide or even just offer moral support when things get tough.  

8) The decision-making process

When investors make a decision whether to invest in your venture, they want to know how you will use their money. It's an essential part of the decision-making process that they use and they want to see that you have a clear vision for your future goals of the company and know how your business will grow over time.

This means that if your business is new, be prepared to give them a solid proof plan for what you're going to do with their money and how long it will take before making a profit.

9) Target the right investors

The right investor will not only offer you capital but also add tangible value to the business as it continues to grow. You want an investor who can strengthen the product, leverage their network of professional relationships, and partner with you throughout the business and remember, not all investors will be the same.

So the type of investor you target will massive depend on where your company is in its maturity and how much equity and control you are willing to give up in exchange.

10) Offer Stocks with Dividends

Investing option that might convince a reluctant partner is to provide a stock offering that isn’t limited to just your company equity, which only offers a value if the company eventually sells. An alternative is to provide investors with a stock that pays dividends, so investors are enticed by immediate cash flow returns.

Offering some amount of returns instead of a long-term ROI could make investing in you a much more attractive option. But for this to work, you need to have a clearly structured compensation strategy. 

11) Have a clear marketing plan

Whether you are starting your business or need to right startup investor funding to get to the next level, investors want to see your marketing plan demonstrating how you will know your audience and how to reach them. 

Investors may want to know about the software you use daily prepare to have an email platform, social media scheduling program, website performance software like Google Analytics, SEO software, and a CRM.

12) Ask for advice

Instead of calling investors and requesting them to invest in your business, consider asking to pick their brains first. Calls or emails asking investors to consider your startup normally come off desperate.

Prefer to seek advice from investors that you admire.

By strategically reaching out to an investor for their advice first, you may be able to build a relationship with them that will result in a greater willingness to invest in your business later on.

Summary

If you're an entrepreneur, pitching to investors feels like a difficult task. You only have a limited time to make a first impression and convince them that you're worth their funding.  We have got you here some strategies used by investors to procure the top entrepreneurs.

FAQ's:

What are the strategies of successful entrepreneurs?

  • Planning 

  • Keep an eye on competitors.

  • Work to broaden your customer base. 

  • Stay close to your customers. 

  • Develop a cash-flow planner.

How do investors contribute to the success of an entrepreneur?

Investors do not just help venture capital; they also bring a wealth of market and business knowledge to help them scale in the right direction.

What are the 5 investment strategies?

  • Growth investing.

  • Value investing. 

  • Quality investing. 

  • Index investing. 

  • Buy and hold investing.

image_pdfimage_print

February 8

0 comments

This was a fun article to read, I hope you enjoyed it.

Subscribe to the Newsletter! Get the latest Business Articles delivered straight to your inbox


Tags


You may also like