What Do Investors Look for in a Business?

Convincing investors to fund your business can be a daunting task. So, we’ve broken down some of the key components they’re looking for when they invest in a company.

The first step of making an investor pitch is researching potential investors to understand their goals and motivations. Their priorities will shape the focus and content of your presentation. Here are a few things investors are generally looking for — depending on the size of your company.

To learn more about creating a great presentation for potential investors, download our How to craft compelling investor presentations guide.

Early Stage Companies

When pitching angel investors and venture capital firms as an early-stage startup, recognize that they are seeking massive growth potential and are willing to accept higher risks for greater rewards.

Do your homework to understand individual investors’ sector interests, portfolio companies, and investing history. Make connections to other startups they have previously funded that achieved hockey stick growth. Demonstrate that you have a unique value proposition, proprietary technology, and the ability to dominate an untapped market and aggressively scale.

Growth Stage Companies

Later-stage VCs and corporate investors funding growing companies want to see concrete validation that your business model actually works. They expect to see that you are on track for hockey stick growth and have a clear path to profitability.

Research existing portfolio companies to find relevant comparisons. Benchmark your traction and financials against comparable deals to showcase metrics indicating future success. 

Emphasize your progress in expanding market share, entering new geographic territories, building operational scale, and setting up a future liquidity event.

Mature Companies

Private equity firms and lenders evaluating established companies want steady returns with limited risk. They look for seasoned management teams and stable cash flows able to produce results consistently across business cycles.

Study their acquisition history and previous deals to identify areas of strategic interest and return requirements for prospective debt and equity deals. Demonstrate the strength of your market leadership, management team, and historical financials. Prove you can deliver consistency even through market volatility.

To learn more about winning over investors, download How to craft compelling investor presentations.

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