Venture Capital: What really turns on investors?

What are the most important things that investors look for before investing in a start-up? What separates rejects from stars? Here are seven characteristics most venture capital investors look for in a promising joint.

Owner of product, system, method or approach

Investors look infallible indications that companies are investing in a leg on competitors. While patents, trademarks, copyrights and trade secrets that others do not guarantee success, many successful projects enjoy one or more of these benefits.

A large potential market

What good is a great product or service if the potential market is too limited? In a relatively small market, a joint venture company would have to capture the entire market to be profitable. Most investors look for companies that operate in markets that are large enough to cause significant revenues and profits. Large sustainable profits usually lead to greater corporate value.

Customer acceptance

Nothing is more convincing than a rapidly growing base of satisfied customers. Well-written business plan, multiple patents and spectacular Power Point presentations are great, but soon accepted the product is rapidly where metal meets the road.

A team of highly talented and experienced management

Investors look for management teams that are talented and able to deliver on their plans. Many businesses fail, not because the business plan is not convincing and well designed. They fail because the management team is able to execute their plan. Investors are partial to management teams that have successfully carried out the plans in the past.

A Well Thought-Out Plan

Speaking of business plan, a plan highly concentrated usually precedes a smashing success. Because most investors have limited time to meet with entrepreneurs seeking funding, it is essential that experienced entrepreneurs put together business plan convincing. In short, well-written plan, they must communicate their vision and business concept in a convincing way, anticipating and responding to critical questions investors.

Exit Strategy

Venture investors typically have limited investment horizons. In many cases, they raised their money with a vehicle of investment funds. The vehicle usually requires them to return to the capital of its investors in a given period of time. Most venture investors have an investment horizon of 3-7 years. Investors 'Angel' high net worth may have more flexibility if they are convinced that greater rewards will come from an investment horizon longer.

The potential for excellent returns

Investors look for companies that can generate the kinds of profits that create significant value of the company. Financial projections should be realistic yet convincing. Large corporate assessments produce high profits. After the exit from the investment of an investor, a value large company typically results in large returns on investment.

If you are making plans to leverage the venture capital market, keep these points in mind. Focus on presentation of an interesting, well written business plan. Once you get your meeting with investors, be ready to communicate concisely how your company can be successful....