4 tips for startups before approaching an investor

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For every startup, money is the life blood and at some or the other point you need to infuse certain amount into your business to grow it. Whether you are seeking few lakhs from your friends/relative or huge lump sum amount through any venture capital firm, you need to do your homework very well before approaching them. To help you avoid certain mistakes which could hinder your approach to seek investment from investors, Entrepreneur India pens down few tips which every startup should follow before approaching an investor…


1. Passion and ability to achieve goal

First thing that an investor looks for in an entrepreneur who approaches them for investment is the passion and his ability to achieve what he desire for. Every entrepreneur should be passionate enough for his entrepreneurial dream so that he can convince the investor with his passion to put his money into his venture.

2. Startup should be definite about when they need funding

Every startup or the entrepreneur who is planning to raise funds should be definite about when to raise it. It is never too late or too early when it comes to fundraising. You just need to see that do you really need funds to grow your venture or you can bootstrap your company to a certain extend.

3. Make sure that you know the product/offering that you have developed

Before making an approach to an investor, every entrepreneur should know the product or the offering on account of which they are seeking investment. Further, they should also be aware about their competitors who are dealing in the same segment so that it becomes easy for them to answer the queries of the investors. Moreover, if they know your key limitation along with the competition and your offering, it will work as the icing on the cake for the entrepreneurs who are there to seek funds. So in short, before approaching the investor know your product/offerings, competitors and your key limitation(s).

4. Team

Team plays a very important role in building or growing any venture. Without team, you will be like a ship without the rudder. So, every entrepreneur needs to build a strong team by putting them together and by filling all the gaps between them. A strong team is the key driving force in seeking funds from the investors.

So these are few key things that every investor looks for in an entrepreneur. So, next time before approaching the investor, do read these tips so that you have a hassle-free investment seeking process.

(With inputs from Vinod Keni, Co-founder & Director, Peachtree Managment, Advisors)