For a business to flourish, investors are the backbone. And especially when a new venture commences its journey, the challenges preceding are ample in number. I believe, at an early stage, capital is the foremost requirement to fund product development, marketing efforts, and to deploy a team.
These necessities often trick new entrepreneurs to accept whatever first offer they receive from the big fishes of the industry. However, this impulsive decision doesn’t often yield great result. As a matter of fact, venture capitalists do a lot of background checks to ensure they are investing in the right companies. But what founders often don’t recognize is that they too have the responsibility and must check the factors which might weigh negatively on their startups.
Enlisted below are a few important considerations, which startups must contemplate before taking the final call.
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Clear Objective
Objectives are defined as targets to be achieved by the organisation. Therefore, if an objective is not defined, it becomes merely impossible to reach at any evident conclusion. Always keep in mind the reason why you started, be it earning money in the short-term or building long-term relationships, clarity at tasks would help you define the first steps.
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Trust
Working in a dynamic environment, it is vital to find investors that stand by you when times are hard and priorities your company’s overall success. Not every venture that approaches your business will be perfectly suited for you, even if they offer more than a handy amount. Always keep your focus on loyalty because that is what will reap more rewards.
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How successful are your investors?
Before reaching on terms, it is important to self introspect the feasibility of joining hands with a particular industrialist. And internet offers a bunch of websites including CB Insights and Matter Mark, which collect data of every single capitalist to help entrepreneurs pick a portfolio best suited for them.
The success rate of investors often proves as a good indicator and could majorly boost a business, if the track record of a capitalist is good. In today’s world, where each dawn is doomed by the grim prospects of COVID-19, getting a capital boost from the right person is the first thing any new business needs.
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Mark your presence
The positive growth for a particular plan only ensures that you have begun well, but you must have in mind plans ‘b’ and ‘c’ to ensure regular flow of operations. When you give a good return to your investors, they will recommend your business to more capitalists. This in turn will make your business stand out. Also, as the chain reaction intensifies, it would be easy for big business investors to give you the benefit of doubt, even during unprecedent circumstances. The more money you raise, the better are the chances of generating more revenue.
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Thinking on similar lines
Another basis to choosing a right investor is to check how comfortable you are working together. Be it sharing similar values on society and life, or aligning on the business goals, a similar view of the world helps develop better and long-term relationships. And I reckon, when you partner with investors, you handpick people to be a part of your journey, which commences well only if the thought processes match.
And at each step towards building your brand name, and subsequently improving its market value, I expect founders to stay updated because that is the only to know and grow.
