For newbie startups, investors are like the boon of the lord because these investors allow funds to run the business. But what if it fails then both have to face the loss and it creates severe pain when any investors lose their money. Due to this reason think several times before investing in startups, because a lack of experience in investing in the right startups could make you bankrupt. Investor need to keep eye all around in order to avoid losses.
Now, if you are willing to invest in startups then there are the following things that you need to understand before putting all the gold in one bucket.
Ask these following questions before dropping your all golds in one bucket
- Do they own excellent management team?
You have stocks of goods but don’t know how to gain benefit from it then this is worthless. Similarly, brand with a expert management companies always flourish more than other who don’t have. Whether it’s a matter of managing the assets, team or funds – robust management team always require to level up the brand or startups.
Investors need to take a look over this as a priority, managing the money in a right place always adds benefits.
- What are real-time investments?
Investments allow to understand the in-depth expertise and knowledge about the market. If you are investing in a right place that will give you insane benefits in future then the future prediction of your business team is matter of appreciation. This is not a cup of tea to get expertise in market prediction, it requires years of experience and proven skills. Brand or startups having such kind of team that create perfect equation with investment and marketing statistics, are the best to choose.
- What kind of behavior founders have for his brand?
If the founder is not passionate enough then there is probably bit of risk to take a step forward for investment. Brand will last longer or not, half of the probability depends on the founder’s behavior and intelligence of mind. What he will do if the business fails or he have any alternate options to get over from point of obstructions? Such kind of question reveals the long term planning of founder and give your inner self assurance that he is reliable enough in order to raise funds for his brand.
- Are lots of opportunity awaiting for your brand?
Opportunity never knocks the door but if you have a business ideas and initiated as a startup that contain lots of awaiting benefits. Then this is the best to choose for investment. Never run a business because of present demands, always think broadly as per the future estimations. If it will benefit you in the same manner like today then it will definitely bring millions at home. Or investors will also not feel any kind of insecurities while sharing the funds.
Make sure choose robust brand that has effective purpose or goal in order to generate revenues.
- Do they have awareness about finance or KPIs of their brand?
Understanding about finance plays an important role and if you are keeping all the required details of the money generating arenas of brand. Then it is quite impressive shot towards the investors. Along with finance, there are another thing that every investor want to listen from you and that is – KPI or key performance indicators. This assist them to understand startup founder is well aware about the priorities of brand and if anything happens then where to divert the ship of brand to avoid collapsing.
- What are the risk to business that can drown it in tough times?
Every coin has two sides similarly, every business has risk and possibility of success both. This is important to understand the percentage of brand’s risk in any situation must be less than the expected. Also there are following risk every brand owns like – regulatory risks, product liability risk, technology risk or any legal risk for terms and violation policies.
Risk is natural in every business but if it is affecting the whole dynamic structure of business then it is a matter of discussion. Before adding funds, clear out each and every kind of hazards consciously.
Wrapping up –
There are following questions that you need to ask before seeking VC funding and this also assist you to understand that which one should be your priorities before investment. From all the above, never invest on the startups just by closed eyes because it is hard to get the return back.