What do investors look for?

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Image: Abu Cassim, Founder of Jozi Angels

When raising capital, it is important to put yourself in the investors' shoes, whether that be a venture capitalist or angel investor.

What are they looking for in a start-up?

A strong team

Typically, investors are looking for is a strong team that has the technical and business expertise to put the necessary processes in place and make them work.

Market

They then look at the market that you are targetting. Are you targetting a market that is big and scalable?

Traction

The third aspect that investors are looking for is traction. They want to see that you've validated your business, that you've already got customers to pay for the service or product that you are offering, and that you are now in a position to go and grow that business given the capital that you are looking for.

 

Investor perspectives

Manuel Koser, MD of Silvertree Brands

We look for strong revenue growth (>50%), good margins (>50%), and good net operating cycle on top of a strong and well-incentivised management team that is tenacious, passionate, and driven by a cause rather than just money or status.

Polo Leteka, Founder of IDF Capital

We place a lot of emphasis on the character of the entrepreneur and how much work they are willing to put in. We want people with teachable spirits. It doesn’t matter how good an idea is; if we think the entrepreneur does not have the right attitude, we definitely will not invest in them.

Kumaran Padayachee, CEO at Spartan

We take a structured finance approach and we always start off with the jockey - the character, competence and commercial acumen. Thereafter we look at the business model and take a view of the entire picture, which gives us insight into whether the funding will be used in a growth context, or to plug a gap in the business model or working capital cycle.

 

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by Abu Cassim, Founder of Jozi Angels

Originally published on Ecommerce.co.za.

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