Before investing in a startup, the first question many investors ask is: Why the Start-up is worth investing? Determining the valuation of a company before it has steady revenues and earnings is actually pretty difficult. Each investor has their own formula which they follow to decide in which startups to invest.
We asked a few investors at 'The Vault' for their best investment ideas. 'The Vault' by Jatin Goel provides a major push to the growing entrepreneurial spirit in the country. It is India's first TV show that facilitates funding on the spot. Here's what the three investors told us:
Size A Market Opportunity
It is important to determine what kind of market size will grab the attention of investors.The market size is defined through the market opportunity and the market potential.
Vivek Bhargava, CEO, iProspect India, said "One should know what are things that investor looks for. So one of the things they look for is the market size of the opportunity. Secondly, for me, revenue is very critical for a startup." He believes that the startup presentation should cover these points then only they will speak in the interest of the investors.
Bhargava has nearly two decades of experience in the field of digital marketing and brand strategies.
Have A Passion For The Business Idea
Ameera Shah, MD Metropolis Healthcare shared her views on how investors should invest in people looking at their capability.
According to her, when evaluating a startup, an investor should look for a team who is considerably passionate about the business idea.
"I am not an investor who wants to go and change the business model and make them do something that I want to make them do. I want them to be convinced about their vision,” Shah said.
Estimate Potential Of Market Size :
Another India's most active angel investor Anupam Mittal feels the investor has three primary things to look at - potential market size, the team and catching the ongoing trend at the right time.
Most Investors would like to know that they are investing in a market with a large potential size .
" Start with looking at the potential of market size because a lot of products and service don’t have a mediate market but could have a future market and that’s a very critical aspect," said Mittal.
Mittal is one of India’s most successful angel investors with over 40 investments.