7 things investors are looking for in startups in Nigeria

7 things investors are looking for in startups in Nigeria

7 things investors are looking for in startups in Nigeria

7 things investors are looking for in startups in Nigeria

Startup investors are not altruistic beings; instead, they seek out certain cues that will sway them to part up their cash. This manual, prepared from the viewpoint of an investor, aims to assist entrepreneurs in understanding the crucial areas to concentrate on and emphasize when seeking money.

If you show me an entrepreneur, I’ll show you a person who needs money. Even while it could be challenging to create a better mousetrap, finding investors for it seems to be even more challenging. Entrepreneurs are always looking for the appropriate connections, whether it be a networking contact or a third party with credibility who can connect them with the ideal individual who has money burning a hole in their pocket. But in the end, it matters more for what you’ve got than for who you know.

If they want to receive funding from investors, they must learn how to attract them. With a discussion of the critical factors investors consider when making an investment decision and some suggestions on where to go for finance, I have compiled the lessons I’ve learnt from my personal experiences in this post.

Investors look for a firm that has a sizable market, a robust product line, and solid growth plans, among other things. The following eight points will assist you win over the right investors. What criteria will a potential investor use to decide whether to invest in your startup?

  1. An exceptional product or service

You must be certain that your product or service is a market leader because investors will probably be reviewing other companies at the same time as yours (or have a convincing plan to make it one). You’ll face competition from other entrepreneurs, so consider what makes your business unique.

  1. High growth potential

They will want to know that there are opportunities for growth and expansion if they are going to invest in your business. Investors will demand evidence that your product has room for expansion and that strategies are in place to enable it. The company should also have a plan in place for how it wants to expand.

  1. A great team you are working with

Investors will also invest in your staff in addition to your goods. They’ll want assurance that their money is going to a skilled, motivated team that is passionate about growing the company. Additionally, they’ll want to see that you and your team get along, cooperate, and have established strong foundations for your startup.

It’s a good idea to provide examples of your teamwork skills. Consider any difficulties you may have had and how you handled them as a team, as well as instances in which you succeeded (or even failed), and how you conduct yourself on a daily basis. This provides astute investors with a picture of the company’s founders and the potential influence they may have in the company’s future development.

It’s also crucial to think about your staff and whether the founders are committed to the project long term. You might already be an expert in a variety of fields, including sales, marketing, research, and development.

The firm may already function efficiently thanks to existing systems. Investors will seek confirmation that the startup will have a reliable, consistent, and strong base. A significant portion of this is the folks who are already there.

  1. Strong ethics and sustainability of your business

The firm may already function efficiently thanks to existing systems. A business that is ethical, has strong ties to the community, and has a positive influence on the environment is very investible. Investors will want the assurance that perhaps the startup will have these qualities. With generation z pressuring businesses to go beyond their profits, younger customers are backing enterprises that emphasize being “ethical.” This means that for a large portion of your target market, your company’s social and environmental responsibility, charitable giving, community involvement, and even how you treat your employees are significantly more significant considerations than price. oundation. A significant portion of this is the folks who are already there.

A company’s reputation can be improved via sustainability, which also increases its lifespan and consumer loyalty. Additionally, it may provide you an advantage over rivals who may place less of an emphasis on sustainability.

The global coronavirus epidemic has made addressing social inequalities and climate change more important. In the next five years, it is predicted that the market for data and services might reach a value of over 5 billion USD due to the demand for sustainability data. Startups in the UK should be aware of this trend. How sustainable and moral is your startup?

7 things investors are looking for in startups in Nigeria

7 things investors are looking for in startups in Nigeria

 

Read Also: 5 types of investors that give money to young companies in Nigeria: What to know and how to approach them

 

  1. A financial plan that is strong and sensible
  • Investors will be curious about the whereabouts of their funds. To avoid financial trouble and be prepared for any potential problems, there should be clear plans for handling the financial parts of the firm. It is essential to have a solid financial strategy. It frequently includes:
  • Projected turnover and profit – You should have numbers that illustrate how much you anticipate selling your goods for and how much of that is profit. These will show a potential investor how quickly your startup will expand.
  • Project cash flow and balances – You need to know exactly how you plan to balance the money coming in and going out.
  • Taking into account any risks – No matter how confident you may be in the success of the enterprise, there will always be a certain amount of financial risk involved. It is crucial to accept that some of your predictions might not come true.

The majority of investors prefer you to be clear about the numbers and any potential hazards rather than sugar-coating it, so be honest about your money. Any astute investor will value transparency as long as you have a plan for handling potential risks and the data to support your estimates.

An investor will find you more appealing as an investment prospect if you have detailed financial data that demonstrates that you understand the financial side of the business.

  1. Clear plans for the use of investment money

You should have specific plans for the quantity of investment you require and how you intend to use the money that is being invested in the firm once you have selected what you would like from an investor. Uncertain plans make it unlikely that an investor will provide money to your firm (or the full amount you are asking for).

The investor may better grasp when they could expect to see a return on their investment and the role they will play if there are clear plans for where the funding will go. Why do you initially need investment? Working capital can help with starting costs, such as the lag between orders, sales, or signups and any outgoings, such as paying suppliers, workers, and running costs. It can also be considerably more cost-effective for businesses than seeking for a loan. This is an excellent approach to give your company a “cushion” and avoid cash flow problems. You could also need to buy more assets as the business expands, like machinery, trucks, and IT equipment.

  1. An honest assessment of your risks and clear plan to mitigate them

There will always be some level of risk in startups. For fear of turning off a potential investor, you might assume it’s best to keep the dangers associated with your startup a secret, but it is a horrible idea. Risks may be something that investors look for before making an investment, therefore hiding them rather than disclosing them will appear more dubious and may turn them off.

You can never completely remove hazards, despite your best efforts, but you can be aware of them and know how to best manage them. Having this in place will demonstrate to investors that you have carefully considered every area of the company and are prepared to address any issues that may arise. Building confidence with investors requires being transparent and honest about any risks you may face and your plans to mitigate them.

Risks could include shifting consumer behavior, heightened competition, or even a pandemic on a worldwide scale!

 

Hope you enjoy this article?

Share your thoughts in the comment session.

Contact us today for your business consultancy and business advisory services. We can help you fine-tune your idea, structure your business, market your business, train your staff, consult on your retirement plan, coach you for financial success. We also write a business plan and help with fundraising strategies and Grant applications. We can help you start, grow, and expand your business.

We help institutions and organizations write concepts, implement Business plans, and train on business Plan writing in Nigeria.

We can help you write a detailed, bankable and comprehensive business plan for your business idea.

Call any of our business plan consultants on 08105636015, 08076359735, and 08113205312.

Or send a WhatsApp message or email us either at dayohub@gmail.com or info@dayoadetiloye.com.

 

Enter your name and email and get the weekly newsletter.. Joining is FREE!

Dayo Adetiloye Logo

Dayo Adetiloye Business Hub is a grassroot business development service provider with a 6 year of track record of excellent service delivery for local and international clients.

As a leading business development service provider in Nigeria, Dayo Adetiloye Business Hub has been recognized and certified by Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) in Conjunction with Enterprise Development Centre (EDC), Pan-Atlantic University (PAU) of the Lagos Business School (LBS).

Our solutions are designed for MSMEs and are supported by deep insight into various industries and extensive experience acquired from over the years by supporting our clients as partners in their business transformation.

Through our services and business activities, we help individuals/entrepreneurs transform their business ideas into a business venture, and support existing business to scale or expand their operation. We also connect startups and MSMEs with opportunities and resources for their business growth.

We have Consulted for more than 5000 MSMEs in the last 6 years in various industry including Agro-processing, Consulting, Training and Education, Financial Services, Waste Management, Renewable Energy, Oil and Gas, Construction, Real Estate, FMCG, Digital Marketing, Personal Branding etc.

Our Vision:
To become the leading grassroot business Hub that provides Business
Development Services in the global online community

Mission Statement:
– Provide bespoke management and business planning consultancy
– To connect MSMEs with opportunities and resources for their business startup, growth and expansion through trainings, seminars, coaching, consulting, mentoring, and Angel investing.
– To inspire, empower and champion entrepreneurship in the global online community.

Business Goals and Objective

– Engender national prosperity by contributing to the creation of at least 100 new businesses every year
– Become a go-to brand for outstanding business development services for MSMEs
– Strategic partnership with local and international organization to empower start-ups
– Continuous innovation to serve our clients better

Core Values:
Integrity
Opportunity Maximization
Digitalization
Personal Development (Capacity Building)
Excellent Customer Satisfaction
Timeliness

Share this:

GI Vital Soft Gel

Grant Winning Blueprint

How to Turn Yourself into a Live Breathing Cash Machine

Ecommerce Business

Follow me on Facebook

Follow me on Twitter

Share this:

LinkedIn
Facebook
Twitter
Email

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

About Us

Dayoadetiloye.com is a property of Dayo Adetiloye Business Hub committed to connecting entrepreneurs with resources.

We are one stop Business Resource Center where we help you discover, Develop and Fulfil your business potentials.

On this platform, we help you develop business plans and strategies, connect you with funding opportunities and share with your business opportunities.

Facebook Community: https://www.facebook.com/groups/156197005130352/

Twitter: www.twitter.com/dayoadetiloye

Email: Dayohub@gmail.com

Copyright 2023 All rights reserved