What Investors Want - Creating The Successful Business Plan
Posted by Manoj Jha on February 24th, 2021
So, what the investors want, what are they looking for when you pitch, well it’s not always what you think obviously they’re looking to make a return on their investment, but what is it that’s going to trigger their interest to have another meeting or maybe even invest well-one of the most important is the business idea that they’re betting on the jockey not the horse what does that mean, well yes, they care about the horse which is your business idea and what your plan is, but they’re, more interested in the jockey which is you as the founding team and you’re managing team they want to know that you’re the right team to do it because in the startup the horse changes regularly by the way, rarely does your original business plan what comes out at the end, So what they want to have the confidence is you as a team are the ones that are going to be smart enough to know when should you adapt or when should you be patient and really push our business model and try to prove it, they really want a clear pain and solution if you can’t identify the pain in the market then how are you going to target the market, you may be able to identify it numerically and all demographically but if you can’t say this is a pain and I know people have it and here’s why I can prove that then you have a big issue and then if your solution isn’t clear then maybe you haven’t thought through your business idea deep enough to explain it in that detail, then you need to go back to the drawing board and work rework on it.
Third they’re going to be looking for market potential which is how big can this company be, now if you have a company it needs to raise five million dollars you’re going to need to have a big exit for them over fifty million dollars merger and acquisition or IPO for them to get a return on investment what they expect that 10X multiple and really they’re looking for the 100X multiple they’re looking for the next Facebook let's get real, now they know not all their investments are and some venture capitalists do look at the deals they know, if they can get this to twenty-five or fifty million they can get a merger and acquisition out of it that’s three times X or five times X but really what they want is to walk in and go we have the next big thing here’s why and you should get on it you don’t want to miss this opportunity that’s where the sell comes into it as they it’s such a great business idea they don’t want to miss it and have someone else get on it, no VC wants to be the guy who passed on Facebook or passed on Twitter and almost all of them have passed on a big deal in the past.
Lastly, your investors are looking for executing ability, what is that, that there’s a clear logical path and you’re the right team to execute on this plan if there’s a lot of big behavioral changes you require out of the market if you only have one customer you sell and if they don’t buy you’re out of business the risk level much goes higher and execute ability of this plan goes down, what creates value in a company is executing your business plan not your business idea and even your technology, you can have the best patents in the world but if you can’t get them in the market and get people buying them you haven’t executed the business plan so these four key points are what you should focus on when you’re looking to sell your business idea and tell the story to investors.
About the AuthorManoj Jha
Joined: February 6th, 2019
Articles Posted: 3
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