3 Things Investors Want To See Before Investing

Read time: 3 minutes

9 out of every 10 startups fail…that’s a staggering 90% failure rate.

Now imagine being an investor and deciding which startup to invest your capital in, no wonder fundraising is one of the most difficult challenges any founder faces.

Investors understand the risks involved; after all, they're seeking that one elusive unicorn that will skyrocket their portfolio.

In today’s dynamic startup world, predicting which ones will soar and which will stumble is tough. Yet, there are pattern signs that savvy investors look for to spot diamonds in the rough.

Today, we will share with you 3 things every early-stage investor wants to see before even taking a further look at your startup, and how you can use them to get investors’ attention and fuel your startup’s growth.

1. Initial Traction

You've poured countless hours and resources into building the perfect pitch deck, ensuring each slide stands out with its impressive design.

Yet, when it comes to showcasing your Go-To-Market (GTM) strategy, flashy graphs, and ambitious projections can only take you so far.

Investors are keen to see the substance behind the numbers. They want to know: What's the story behind these projections? Have you tested your ideas in the real world?

Without tangible evidence of initial traction, those graphs are merely wishful thinking.

However, if you've navigated the GTM process diligently, gathering real data and witnessing genuine traction, your projections carry weight.

By grounding your numbers in reality, you demonstrate your ability to execute and adapt, earning investors' confidence in your startup's potential for success.

2. Repetitive Success

Many startup founders overlook a crucial milestone: achieving repetitive success.

Investors value startups that consistently replicate success across channels, target audiences, and products.

By honing in on a specific channel, ideal customer profile (ICP), and product offering, you mitigate a significant portion of the risk.

Investors understand that this approach lays the groundwork for achieving Product-Market Fit (PMF), a pivotal moment when exponential growth becomes possible.

So instead of touting broad appeal to everyone, focus your efforts on refining a single channel, defining your ideal customer, and perfecting your product.

3. Scalable Business Model

A key aspect that investors scrutinize is the scalability of your business model.

If your startup fails to decrease costs as it expands its user or customer base, your bottom-line revenue will remain stagnant regardless of top-line growth.

A scalable business model not only boosts customer or user lifetime value (LTV) but also prioritizes cost efficiency to capitalize on economies of scale as it grows.

Conclusion

Capturing the attention and investment of early-stage investors requires more than just a polished pitch deck and promising projections.

It relies on tangible evidence of initial traction, repetitive success, and a scalable business model.

By grounding your pitch in real data and demonstrating your ability to replicate success, you significantly mitigate risk and increase investor confidence in your startup's potential for growth and profitability.

If you found these tips valuable, email us or drop a comment below to let us know. Your feedback helps us continue supporting startups like yours.

If you are ready to take your startup to the next level, this is how we can help 🏆️ 

• Hands-on Collaboration: If you are a startup founder who has initial traction and would benefit from a highly customized DWY approach to help accelerate your startup’s revenue growth.