Let’s start with the basic question, what would attract an investor to invest in your business? There could be many strategic and creative ideas that could be used to lure an investor, but the most efficient and simple solution would be to think like an investor.
You have to put yourself in your investors shoes, as it’s said that only the wearer knows where the shoe bites. So to attract an investor you will have to think like one, you will have to anticipate what the potential investor requires from you. As he is going to invest his money (capital) with the expectations of great returns. They would want their money to earn for them. Depending on the risk appetite an investor expects maximum returns with minimum risk.
To prepare a near to perfect convincing pitch, you have to keep in mind the following points:
1. For startup projects,investors are seeking long lasting future of business which mostly depends on retaining customers and capability of adding more, for which an effective and executable plan is needed.
2. Investors are attracted to projects providing solution to problems which lot of people would be facing including themselves but solution is still unexplored.
3. A great idea is worthless without great execution. Investors want to see proper commitment for idea and successful implementation towards that idea despite of grave challenges.
4. In startups, teams inherent qualities like smart thinking, adapting to the changing environment, having similar opinion over a problem attracts investors for long term investment.
Apart from startups, investors investing in running businesses are at much lesser risk as they would be knowing the past performance of the business, its profitability and market share. They can take an informed decision here.
Despite of all these challenges, startups have flourished and gained investors confidence. Many startups like Ola, Uber, Bigbasket have already captured their markets and are expanding exponentially. So getting your first investor is not an easy task and investing in a right business is also very crucial.