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Frequently Asked Questions
Some simple questions and answers:
What are investors looking for in a venture and in an entrepreneur?
In our experience, investors look for certain key factors in the business plan of a start-up venture. While everyone is continually looking for a winning system, there are some fundamental questions that entrepreneurs should always ask themselves.
How distinctive is the product or service and what competitive advantage does it have?
How can it be protected and what are the barriers to entry for the competition?
Why hasn't the product or service previously been available?
What is the market potential and what are the factors that will lead to successful target market penetration?
Has comprehensive market research been carried out?
What are the assumptions that drive the revenue projections and the costs described in the financial model?
Are they realistic?
Can the risks be identified?
Investors often look at the people before the project.
Who are the managers behind the venture, what is their expertise and experience, why are they planning the business and are they likely to be successful?
Investors are also keen to know how much commitment has been made to the venture - has the entrepreneur spent any money on it? People talk about the amount of lost earnings they have suffered and the 'sweat equity' they have employed having given up their previous job, but it is hard cash put into a project, even £1,000, that can make a difference to the attitude of investors. Obviously many may have spent several tens of thousands of pounds or more of their own money, but it is the difference between something which is merely an idea on paper and something that has been at least partially developed and committed to that can generate that all-important initial interest.
Investors look for certain things in entrepreneurs.
Are they realistic? What is their background and experience?
Are they qualified to undertake the venture (not just educational certificates)?
Have they done their research and sufficient planning? Can you sell?