What data do investors want to see before funding your startup?

My best kept secret....build a profitable company, do not rely on investment to get off the ground, eat shit for a year, whether solo or with people that are down for the ride. Building a business isn't pretty, convincing investors that your worthy of their paper is even harder, go to investors with revenue and even better EBITDA, position your self to be the A side, and dont let them dictate the conversation, be in control of your own destiny. Bring real market and revenue data, don't bring pipe dreams, you cant take ideas to the bank.

In my experience, it's important to consider: 1. Clear roles and responsibilities for founders in the long run. 2. A defined process model for governance and risk management. 3. Most importantly, how the startup will handle conflicts at senior or investor levels. Make sure decision-making powers are clearly outlined in the company charters or before investment.

What is that you are doing or bringing to the table? Is it something new or better than what others have already done? You need to show what your USP is and why people need your products over others. Use social proof to show that this is what the problem is and this is why your solution is the best amongst all others

Identify a pressing market need and present your unique solution. Use customer surveys and case studies to demonstrate how your product solves this problem more effectively than existing alternatives. Remember, a well-articulated problem and solution set the foundation for your startup's success.

If applicable, provide detailed information on any intellectual property or unique technology that gives your startup a competitive advantage. This could include patents, proprietary technology, or exclusive partnerships.

Investors want to see traction - tangible proof that people want your product and are willing to pay for it. The best form of traction is SALES. But it can also include research, purchase orders, and intellectual property.

Demonstrate efficient use of resources and a clear path to scaling up operations can significantly reassure investors about the sustainability and long-term growth potential of your startup.

Showcase your startup's progress using key metrics such as Customer Acquisition Cost (CAC), Churn Rate, and Customer Lifetime Value (CLV). These figures highlight your efficiency in gaining and retaining valuable customers. Additionally, present Monthly Recurring Revenue (MRR) or Annual Run Rate (ARR) for subscription-based models, along with Monthly Active Users (MAU) for digital platforms. These metrics collectively paint a picture of your startup's traction, user engagement, and potential for sustainable growth, essential factors for attracting investors.

Traction and growth are of the strongest criteria for investors. A startup without any paying customers is merely a hobby and not a business.

They would LOVE to see traction. This is something to make them feel safe about investing in you. It translates to, "It works."

As the saying goes, "Investors bet on the jockey, not the horse." This means investors invest in people first, and ideas second. To be investable means to be coachable, confident, and likely to reach the next milestone set forth for the company and it's investors.

Like most investors, I've been discussing this topic with say: I don't get charmed by the pitch-decks or business-plan. The idea itself is also nothing without execution that didn't happen yet. Even the already available traction is a teaser, but that's not the main one. What I am investing into, is always... people. And during all those initial meetups with potential portfolio candidates, the only question I am trying to answer while they are talking about their important ideas and details is: Will this person in front of me dig into it together with me, when the trouble comes? And the trouble will always come. :) Or will they run away and leave me dealing with all the remaining shit? :)

Emphasize the dynamics of your team and their collaborative achievements. Showcase specific projects or challenges where your team's diversity, skills, and innovative approaches led to significant successes.

Pessoas! O maior capital que uma empresa possui s?o as pessoas. Em termos de startups ainda mais. A vis?o que os fundadores têm, a garra, a for?a de vontade acabam suplantando outros dados. English: People! The biggest capital a company has are its people. In terms of startups even more so. The vision that the founders have, the determination, the willpower end up supplanting other data.

The founder team is really important, but be prepared for bad situations. I would insist to have a reverse vesting in place for every member in the founders team before investing.

One thing the founders can't change: The market. Even when having a strong PSF it is sometimes very hard to predict the market and achieve PMF. I had already a few ventures that didn't made it because of the market characteristics and not because of the product or team. Btw. with market characteristics I mean things like regulations, market growth or buying cycles.

A major evaluation point for them is the market. An average founder in a large market can still survive because the room for error is larger and even a great, experienced founder in a small market might not be a great bet for them. Competitors also are a point of concern for the investors. If there are large incumbents who are offering a similar service and have been in the market for long, it would be difficult for the investors to take a bet on you. So you need to be in a big enough market, which is growing at a steady pace and is not too crowded. If you are in a crowded space, you need to have a clear competitive advantage to succeed.

Investors are interested in data that helps them understand the market landscape and your startup's position within it. Adoption metrics, engagement rates, and user satisfaction scores provide valuable insights into how well your product resonates with the target market. Metrics related to market share, competitive positioning, and user sentiment compared to competitors are vital for demonstrating your startup's potential to thrive.

Keeping these projections confident. In India, unfortunately female founders tend to have more conservative projections compared to their male founder counterparts even if their business is completely sound. This hurts them when they’re looking for venture funding, because we want to believe in the size of the vision.

This is the main focus when raising capital from institutional investors like VC & PE. Too often they spend all their time here & miss opportunities with due diligence into the fundamental operations & competitive advantages of the business. Whereas, financial due diligence can be a little less intense when raising money from accredited individuals. I recommend all entrepreneurs to keep files as if you were assembling a digital data room from day one so if you ever need financial data it is easily accessible & ready to go. You have a spreadsheet that lists all your asset purchases, the date etc., you have each year’s taxes & financials sorted out, etc.

Investors inevitably want to see financial data for your startup. This includes revenue predictions, conversion rates, and other financial metrics providing critical insights into the sustainability and profitability of your business. Clear and realistic financial projections, along with an understanding of how product metrics correlate with financial outcomes, contribute to building investor confidence.

Valuing my company after three years of bootstrapping involves considering revenue, market position, growth potential, and competitive landscape. Deciding how much to raise versus equity to give up is crucial; balance is key. Assess your funding needs, investor expectations, and your valuation. Showcasing historical performance and a strong future vision is essential, demonstrating adaptability and commitment. In the current economy, focus on realistic strategies and nurturing relationships, especially with friends and family investors. It's about balancing your company's proven track record with a compelling vision for the future.

Communicating your startup's vision and potential impact is vital, and investors are keen to see data that bolsters this narrative. Utilizing product data to weave a compelling story about your startup's vision, its potential societal influence, and illustrating how your product actively contributes to positive change not only strengthens your pitch but also establishes a resonant narrative that captures the attention and confidence of potential investors. This approach goes beyond mere words, providing tangible evidence through data to substantiate the transformative direction and societal value your startup aims to achieve.

In my experience raising across pre-seed, seed, and Series A, it's key to adjust the data you provide to your stage. Investors have different expectations. The earlier the stage, the more emphasis you should place on your team, your vision, and the market. The later the stage, the more your traction and financial projections matter. Series A investors care less about your solution, because they have a track record of data. Seed investors care less about your financial projections, because it's all made up.

S=Qr springs to mind! Success, denoted as S, is determined by the multiplication of r, representing the potential value of a given idea, and Q, an individual's capacity to bring that idea into fruition—referred to as their "Q-factor." Hence, if an individual with a low Q-factor encounters a brilliant idea with a substantial r value, the impact remains modest. This is because the resulting product, or Qr, is diminished by the limited Q-factor. Conversely, there are instances where a creative individual with a high Q-factor produces multiple products with weak or mediocre—low r—qualities. On occasion, the convergence of a remarkable idea and exceptional skill leads to epic success.

In my 25 years of experience on both ends(as an investor and as a part of a start-up team looking for funding), every investor wants to see something else before funding your startup. Most will start by looking at your business plan which has now been simplified to ten pagers. Then investors' demands will range anywhere from your financial statements to the horoscope of the funders. Prepare as much as possible, but don't overdo it, and be prepared for demands you just cannot prepare for.

Sharing a comprehensive list of data required by investors before funding: - Financial Projections including quarterly cashflow (5 years is ideal) - MIS - Current Round details - Exisiting Captable - Customer Information for validation - Employee Contracts - Founder's agreement & KMP docs - ESOP pool related information - GTM & Prouct launch Doc Keep these documents ready for a free flowijg experience.