Unless startups know what investors expect and are looking for, it’s hard to give the right signals, prepare, and position your company to be the recipient of funding. So what do investors really want? In asking this question, it’s often easiest to first address what they don’t want, which is:
1. Duh, to lose their money!
2. To be made to look foolish they want to be proud of their Impact investment.
Everything else, including expectations, circles back to avoiding these 2 pain points.
Some expectations may have arrived at naturally and individually. Many others mention items that investors believe they need to check off. But they all come back to avoiding these 2 major pain points. Here is a list of the 19 items that Impact investors want and expect:
1. A well-thought-out and researched business idea and plan
2. Organization structure do you have the A-players in your team
3. Integrity and character
4. Answers to obvious questions
5. That you know what you don’t know and don’t have, but you have a plan to get it
6. Market potential
7. Did you measure your Impact, how much CO2 do you really reduce
8. Plans for additional rounds of funding and/or exits
9. That you have put your heart into the project
10. That you have and will keep skin in the game
11. Feedback from others
12. Proof of demand
13. That they can get along with you
14. That you are coach able
15. Consideration of the safety of their capital and time
16. A good personal match
17. Passion for your product or service
18. Passion for connecting with and working with them
19. An opportunity that will take them closer to their Impact goals
While pitching and engaging in other fundraising efforts (and even in the activities leading up to those efforts), entrepreneurs must keep in mind that they are not selling their product. They are selling an investment in their company. This shouldn’t mean completely
redesigning the venture and sacrificing the original vision simply to raise funding (although some do go through the process when it becomes apparent that it is needed).
Still, if founders work to know their investors as they do their customers, they’ll find the fundraising process easier. Understand investors’ fears and pain points, their checkboxes, and their goals.
This doesn’t just mean cold monetary goals. Go well beyond promised ROI and crude sales and cash-flow predictions. Institutional and individual investors have metrics and numbers that they are trying to hit.
What else drives investors to invest? Outdoing their competition, bragging rights, strategic navigating, the desire for security, and a drive to fulfill their potential fuels and facilitates solutions that they care about. These are constants. Then there are the factors that are more spontaneous and heat of the moment. Does a decision-maker need to impress or please someone else in the chain by making an
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We have 700 Impact investors in our network and we know their expectations and we will share this with you on our Impact Fundraising Mastery event on the 21st of November 2019.
So save the date and put yourself on the waiting list Click here.
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