What to Look for in an Investment
Launching a company today is more accessible to many people, but that does not mean that startups are more likely to succeed now than they were in the past. There are certainly more startups entering the market now than there were when I started, but the chances of failure haven’t reduced, in fact they’re directly in proportion to the number of startups that take place today. When making an investment, investors will choose a combination of the person and idea that they believe will be successful. If a business has many successes, it will be talked about in the media, and if it’s in the media, it will be subject to judgement and criticism, public scrutiny and copying. Successful startups continually think about the unique solution they can bring to the table, and this is what investors look for.
When I first launched myself into the market, I believed that ideas were undervalued, but now I believe that ideas are beside the point. Mostly, investors invest in people, not ideas. Although, ideas are what will drive the interest in people in the first place.
Investment for Investors
Investors select a small number of the best startups, and they won’t risk investing in a startup that has an idea but no strategy, or a strategy but no customer acquisition.
“Investors want to see the passion and commitment in your actions. They want to see that you truly care about what you are doing and how much of your own skin is involved in the game.”
What investors look for is your commercial traction, how your ideas are executed, why your team is positioned to build and implement a plan to become a leader in the market, and the company’s potential for growth and flexibility to adapt.
Sometimes an investor will meet a great entrepreneur, but they will lack certainty about some part of their business or how they will access their niche. I avoid investing in businesses that have no plan because they are likely on the trail to failure. As an investor I can guide you, but you need to have the ability to be moulded.
When I make an investment, I do so with the awareness that many things can go wrong. My only certainty is my faith in the business venture, its potential for growth and my faith in the person.
Investment making is a challenging process, so a good investor will be disciplined in the selection of investable opportunities. Knowing the right questions to ask will aid you in effectively making the right investment decisions. Entrepreneurship is a challenging path, but I can tell you from my own experience that your chances of success are enormously improved when you are aware of what to look for.