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9 Investor checklist for capturing untapped funds

9 Investor checklist for capturing untapped funds
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

There is no dearth of private equity investors willing to invest significant amount of money in unique ideas that solve critical business problems or cater to the needs of niche market segments. This clearly indicates that there is quite a lot of surplus floating in the market. All you need to do is master the art of determining right kinds of markets and investors. Go by the investor checklist given below and figure out some tried and tested ways that can help you capture untapped funds:

1.Unique Ideas:

You are sure to get spotted by potent private equity investors if they are convinced with the fact that your idea is unique and does not fall under the category of me-too businesses. Proprietary features, exclusive licenses and competitive edge are some the features that incentivize them to consider you over others and stay invested for long.

2.Product/ Service:

Describe your product from a macro perspective. Drill down to the basics as to how will your product revolutionize the way industry works. Emphasize on what sets you apart from the crowd. Do not leave a single question unanswered and equip them with necessary product know-how. Differentiate your products from the rest and illustrate ways in which it can live up to unmet market demands. Portray that nobody else has a “mouse trap” as efficient as yours.

3.Financial Performance:

Put your best foot forward with reasonably strong numbers to back your plans up with. You’ve got to be good with numeric data to prove the potential of your ideas, especially when you seek to raise funds from investors who have several other potent business ideas to support. Enhance your chances of tapping maximum amount of market surplus by putting some thoughtful projections on both future cashflows as well as costs. Investors would appreciate that you are sound enough when it comes to financial metrics.

4.Industry Expertise:

It is important for budding entrepreneurs to be well versed with the industry that they are operating in because investors don't deal with inexperienced entrepreneurs. Instead, they look for people with excellent leadership qualities and high performance track record. Inspire confidence of the investors with your passion for your business ideas.

5.Marketing Strategy:

Articulate your go-to-market strategy and woo your audiences with proven go-to-market strategies. One thing worth noting is that the scope of your marketing strategy would depend upon your phase of development. Leave no stone unturned to prove your mettle and present precise plans to roll out your product/services. Enable the investors to your gauge your propensity to capture market share within stipulated time frame.

6.Business Model:

Justify your existing business model and present it to the investors in a way that depicts its potential to generate profits. Each investor has different set of requirements and his decision is governed by different set of notions. Customize your pitch and business plans keeping the kinds of investors in mind.

7.Market Size:

Seed capital investors look for businesses that cater to significantly large market segments. On the other hand, venture capitalists look for strong markets with bullish outlook & limited competition. With the world that’s obsessed with big data, larger customer base is directly proportional to the endurance of your business plan. Make it easier for the investor to understand the capacity of your business to generate positive cashflows.

8.Scalability:

Scalability of the venture is crucial. Considering that the market size is big enough, the incremental cost of revenues should decrease with the passage of time. The crux of the idea should be so simple that it shouldn’t require extraordinary resources to grow and flourish. Classic example of a scalable business model is Google, a search engine that has gazillions of subscribers. Each new feature addition would come at relatively lower incremental cost. Another example is that of Microsoft, a product company where the cost of developing the product is high initially, but the cost of replication and distribution is negligible.

9.Human Capital:

Don’t be surprised if you’ve not heard of this before. Private equity evaluation process is not just about you but your entire team. Investors are ready to invest in your ideas backed by your business acumen, passion and commitment. A successful venture is never a one-man wonder, instead it takes a team to reach out markets spread across the globe and live up to their unique business needs.

Edition: December 2016

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