Investors are setting up strong criteria before investing in a big data startup
Investors can be a great helping hand to your company. First, since it is not a loan, an investor does not require monthly payments. An investor can also be a trustworthy source of business advice and may have a large company network on which you can draw. However, this is not free money; your investors will have certain expectations. Especially, while they invest in a big data startup, they have certain criteria set beforehand. If you are complying with it, then your company can bang the funding.
Here are 5 things that investors look for before investing in a big data startup.
1. Hard Data
The first on the list is hard data. As previously stated, investors desire to make money. It is your responsibility to demonstrate to them that your organization will make that ambition a reality for them.
If your company has been in operation for a time, you must demonstrate that you have had great financial performance thus far. If your company hasn’t yet begun operations, you’ll need to demonstrate what you can anticipate bringing in, when you’ll meet your targets, and when your investors may expect to see a return on their investment.
2. Solid Business Plan
A great business plan shows investors that you’re enthusiastic about your company and that you’ve thought about how you’re going to make money. Although your business plan will not be enough to persuade investors to back you, no investor will invest until you have one.
3. Unique Idea
The terms “new and inventive” thrill both investors and the general population. The bottom line is that if the market is flooded with hundreds of similar products, your company is unlikely to be a tremendous success.
Explain to investors what it is about your service or product that sets it apart. Is there a market for your one-of-a-kind product? Is it a one-of-a-kind solution?
You don’t have to have invented something completely unique, but you must demonstrate how your product or service differs from or outperforms your competitors’ offerings.
4. Business Readiness
Many people have potential company ideas, but few have the motivation and resources to turn those ideas into a real, financially viable enterprise. Demonstrate to your investors that you can do more than just talk.
Is your business prepared to take off and hit the floor running? If you can demonstrate that you have all of the critical components in place, you will pique the interest of investors since they will know that they will see a return on their investment relatively soon.
5. Crystal Clear Investment Structure
You’ll need to set up a business framework that allows other parties to invest. You’ll also need a clear blueprint for how the investment will function. Will the investors be able to vote on corporate decisions if they are associates or shareholders?
Part of this entails having a clear value for your company, a way to back up your proposal for a specific amount of money in exchange for a specific amount of ownership. If you want $200,000 for a 10% stake, for example, you must be able to demonstrate that your company is genuinely worth $1 million.
Investors are looking to make a profit. Your job is to demonstrate that you will do just that and that you will do it better than their other investing options. The most crucial thing you can do to make a good pitch is to be well prepared. That company plan should be as watertight as possible. Your story should be interesting and well-planned. You should know what you’re trying to do with the capital and how you’re planning to structure the transaction.
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