Each and every year we see a lot of new startups emerging and make it successful while few have blink and miss appearance. Startups are always on the lookout for investment for their ideas and products. Investors are looking to invest in startups even though the stats state that more than 50 percent of small business fail in the first four years.
An entrepreneur wonders where they can find the right investor for the idea, but the truth is the right startup is able to garner the attention of the investor if they have the right idea.
The success of a startup is very opinioned and dependent upon the type of industry and business involved. Even though investing in startups has its share of risk but definitely, growth is one major aspect to invest. Here are a few reasons investors find it their money’s worth to invest in a startup.
1. The Product
The product is an important aspect when an investor looks to invest in a particular business. What is the potential market for a particular product? How is the product going to make an impact in the market? How much traction the product/service can bring in? What is the market size of the product/service? All these points interest the investor while finding the right kind of startup to invest.
2. Investors see if the Business is Scalable
Scalability is yet another factor that an investor searches for when asking a decision to invest. A scalable business depends upon the market size of the product/business. Only a high growth and scalable business are able to give the 10 times the return on investment.
3. The Timing of the Product
Investors analyze and keenly follow the market trends, as well as the wider economic condition before making an investment decision. When they feel that the product rises at the right time and is able to occupy a large market share they deem it the perfect product/service to invest.
Competition for the product is a major force for an investor to make an investment decision. Whether a monopoly or a disruptive marketing strategy, the investor needs to have a strong belief that the product is going to work in the market.
Profitability is key for an investor. Remember that an investor is interested in making profits. An investor may be attracted to a particular startup if they are already making a profit or show promising signs of making a profit.
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