Essential elements to choosing a start-up company to fund
Recently, start-ups have become one of the broadest areas for investment, in terms of shares and profits ratio. As you can participate in them with the lowest possible capital amount, and get a profitable and satisfactory financial return.
But investing in these start-ups is not random, but based on several considerations that the investor prioritises so that the company chooses the right idea for him.
As for start-ups, they do not agree to offer any investors without looking at any assumptions. There is also a range of elements to rely on to select the right investor, through which the company's leader ensures the success and continuity of the company.
How can investors choose a start-up to fund?
There is a range of points that an investor relies on when choosing a specific company to fund, as their funds cannot be placed in any unsecured project, whose success and continued profit, as is ordered according to several considerations to ensure access to the desired profit.
Detailed study of the project and the startup's idea
The investor often conducts a detailed study of the idea of the project, if he has sufficient experience, or selects someone who is experienced. To know the extent of its success or failure, to determine the suitable decision.
Comparison between investment opportunities
The investor should monitor the details of all projects, to identify the objectives of the project and the related field, according to which the investor selects the suitable start-up which relates to his directions and experience.
Suitable funding field for the investor
The investor does not choose any startup randomly, but rather recognizes its field, determines its suitability for him, as well as for the market demands, and its suitability for the country's development process ..etc, through which he chooses the suitable field.
Diversity of investment operations
The smart investor does not risk putting his full capital into a single investment, but rather distributes it among a range of different well-studied investment operations, to ensure that profits are earned at different rates, and in case of loss not all of his money will be lost.
How to choose the right investor for the start-up?
There are some points to be taken into account in choosing an investor for the start-up, as it is not a random process, but rather based on several important elements.
Such as choosing an investor who believes in the start-up idea and follows the same owner’s direction, and determining what he wants from the investor he is looking for.
Familiarity with different types of investors
It is necessary to know all types of investors the fund seekers, which are available in the market, and to well understand their details, to choose from them.
These include personal investors, angel investors, venture capitalists, and others, each of whom has his or her privileges suited to each start-up's field.
Determine what you need from the investor
The owner of the start-up should arrange a meeting with the investor and discuss the latest investments, developments, and results, also the form of the contract they prefer, and their focus when the investment begins in a startup so that he can select the right investor for his company.
Find an investor who agrees with the start-up’s direction
The owner of the startup and the investor should share a common direction, determining that will by analysing his motivation to fund certain start-ups, and what his vision is for continuing and wanting to develop them.
All these points help to determine whether the investor's mind fits the thoughts of the start-up's owner.
Preparing for the launch of the startup
The start-up's fundamentals should be determined based on the owner’s requirements from the investor, and accordingly, he can choose the investor who has all his desired specifications.
Social relations network expansion and recommendations requests
The investor is not driven to invest in a start-up just because of its brilliant idea, sometimes the owner of the start-up is the reason. So, constant interaction with different investors, communicating and asking for recommendations, and sharing ideas, as well as holding conversations and discussions make investors and entrepreneurs meet at a common point, and from this point, investors start to conclude partnerships.