Raise funding for your startup is a long and difficult process. In addition, if you do not have a high track record or excellent sales capacity, the reality is that you must have seen at least four to five potential investors before you have found the potentially right investor.
Investing in an early-stage startup is risky. In order to make a decision, investors often screen on the basis of a number of simple criteria. If the deal does not come through a good connection or someone who they trust, there is a big chance that the deal will be ignored. The first thing investors do when they see a startup deal is scanning the pitchdeck. So make sure it is clear and attractive.
If your startup has passed this hurdle, investors still do not spend much time on you. When you are chosen, there will often be an appointment where you can present yourself in 20 minutes with a further question round. There are often several startups chosen for such a presentation, therefore be well prepared.
After this screening process, the investor will look carefully at your startup and evaluate the investment opportunities. Even after this long process, the chance of a ‘no’ is big. Examples such as; the team does not work well, the market is too small and the traction is too low are common. All these reasons result in an investor not investing in 99 of the 100 propositions that are offered.
Early-stage investors live in an uncertainty, nobody knows for sure whether the customers will buy the products, the team falls apart or competitors will destroy the startup. Only when an investor is really convinced of the startup they will look at it better and the further negotiation process can be started.
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