What Investors Look For

What Investors Look For

Fundraising

2 min read So you’re about to raise funding for your startup and wonder what investors look for.

Startups can be pretty shy about discussing their current revenue in the business’s early stages. Being pre-revenue or just beginning to show traction is typical in the beginning, and investors know this.

Even if you are pre-revenue, you can show traction with your startup. You define your traction as customer activity, and you don’t need to have revenue to show there’s traction with customers.

To exhibit that you have traction while pre-revenue, focus on customer engagement at all phases, even before you have a product.

One of the most important things to understand as an early-stage startup is this:

The investor doesn’t care about the size of revenue.

What investors look for is the predictability of that revenue.

If you do have a sales funnel, it’s helpful to share that with the investors.

Having visibility on that progress is vital because the investor can then see the traction you have in your sales prospecting process. Use the funnel in multiple investor updates to show how prospects are moving through it.

When speaking with investors, mention your process with phrases such as:

“For every ten leads, we generate one customer worth $5000 in revenue.”

Showing leads is precisely what investors are looking for. It shows that you have a system with repeatable and predictable outcomes.

Additionally, when communicating with investors, always include the customers in your discussions.

Never engage in an investor meeting without new information about your customers and always mention any updates you have on revenue.

TEN Capital helps startups, growth companies, and investors, raise funding through its extensive network of accredited investors.

Our Funding as a Service program includes investor introductions, an email campaign with updates, pitch events, webinars, podcast interviews, and assistance with investment closing documents including pitch decks and data rooms.

In short: we provide the leg-work, saving you time and money.

Sign up today to speak to a TEN team member and see if TEN Capital’s Funding as a Service program is right for your fundraise: https://tencapital.group/company-signup-form/


Hall T. Martin is the founder and CEO of the TEN Capital Network.TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

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