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What Investors look for in technology start­ups

Each investor will look for something different when being pitched by a start­up.  Most will look at the whole package and then dissect the individual parts but the most important thing that most investors will look for is, what is their return on investment and when can they expect to start to see it.

Getting Funding Is A Huge Priority For Tech Start­Ups

Most tech start­ups require a substantial amount of capital to move things forward properly.  It is not cheap to get a tech start­up off the ground and insufficient funding can break a company before it even gets started.  And it is a tricky and stressful process to go through as you know how much you need that money to build the business properly, but you don’t want to give away your first born to get it.

What Do Investors Look For In Companies

Different investors look for different things in the companies that they decide to invest in and it will likely depend on how much they are asked to invest as well.  But there is also a difference in what they are investing in from the technology side and what they are investing in from a company standpoint. Sometimes the technology is something that, once developed, or at least down the road of development, begins to take on a life of its own.  Sometimes an investor will see that piece as something that could easily be bought in full to take to its next level with a different team than the one that founded it and sometimes an investor will see the team as an integral part of the success of the investment as a whole.

It is important to note that the same can be true of the founders of the company as well.  Some will want to find investment so that they can continue on their path to grow the company themselves and some may have an outright sale or a scaled sale in mind to where they transition the company over and either move on to another project or become part of the senior management/board of directors moving forward.

How Can Start­ups Set Themselves Up For A Successful Investor Pitch

A start­up team will likely always feel that there is at least a few more things that they want to do to tweak a pitch deck prior to presenting it to the potential investors.  Having a comprehensive but very clearly organized presentation with professionally designed visual materials will go a long way to impress the investors.  But at the end of the day, the numbers and the details on how you are going to reach them must make sense and impress.

Do Investors Put More Emphasis On The Idea Or The People

Both the idea and the people being pitched to an investor are obviously important but an investor but which one is more important really depends on whether the investor sees the tremendous power of truly passionate, driven entrepreneurial­-minded people with global vision, or they see an idea that they like and ultimately see themselves gradually phasing the original ownership and development team out and taking over the company altogether.  However, by doing some basic research online, you can uncover a significant amount of invaluable information about your potential investors based on their current holdings and operations.  If you can’t find much information, it will become very evident, very quickly once you are pitching to them which way they tend to lean.

The cold hard truth is that 90% of startups fail for a number of reasons. Failure to hire quality candidates can dramatically set you back – this will help you hire smarter.