entrepreneurs

5 Things Entrepreneurs Can Expect From Investors

Lifestyle

Raising funds for your business can be difficult. The process can be both demanding and daunting because investors are smart and tend to be sceptical about the business opportunities presented to them. If you are looking at getting business funds from investors, be prepared to provide a lot of information and answer a lot of questions.

To give you an idea, here are a few questions to expect from would-be investors.

Market opportunity –

This is essentially the first information you will need to provide would be investors. These people want to know they are putting their money in a business that would make profit, and a business without a unique market opportunity is bound to fail. How large is the market you expect to serve? Large here covers both the immediate demand and the future demand. If it is an emerging market, the investor will want to know how big the market is expected to grow and what will drive its growth. If it is an existing market, the investor will want to know how you intend to stand out.

Realistic projections –

An investor will want you to demonstrate how you intend to capture your share of market and how much your revenue projection is. As earlier pointed out, investors are rather smart so they can easily tell if your projections are realistic based on the current and projected market conditions. It is your projections that will help them determine if your business is a risk worth taking. One way to de-risk your investment opportunity is to show proof that your product or service is already engaging the market. This will help set you apart from the other business opportunities that appear on paper only.

Team capability –

A lot of business owners venture into business with little or no experience or knowledge about their industry, sadly many investors have been burnt as a result of this. This is why a potential investor will want you to concretely reassure him or her about the capability of you and your team members in running the business. What is your area of expertise that makes you an authority in the industry? Do the members have skills related to selling, marketing, production and operations? You should expect to get this question from a potential investor.

Business risk –

Every business comes with its element of risk; however, how you plan to avoid and manage these risks will go a long way to make your business presentation appealing. You should expect to answer questions concerning every conceivable risk attached to your business. In fact, you should have information on all the different ways the business can go wrong and how you can prevent this at your fingertips. This includes business coverage, storage and security, market upheavals and so on.

Investor relevance –

There are investors who are simply satisfied with committing their funds to your business and taking a backseat, others are not so reticent. You should expect an investor to want to know whether you want an active investor or one whose job is to simply hold the purse strings. However, don’t take the place of an active investor for granted. They can bring years of experience and insight to the table.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.