What investors are looking for

Source: Exec

Date :28/11/2007 17:06:48

Julian Hickman explains the attributes that attract investors to a business.

The challenge for businesses seeking investment is to understand the issues which matter to investors, as addressing them will be critical to success. When an investor is contemplating putting funding into a company he or she analyses the business using a process known as due diligence.

This identifies whether the business fulfils the many different criteria that the investor requires.

Building trust

The first criterion many investors apply to a potential investment is how they have been introduced to the deal. Is it from a team that has had previous successes? Has it been presented by another investor?

Much of the struggle to gain investment suddenly becomes much easier if there is a coinvestor already present to give them confidence in the venture. Trust is all-important and a strong, experienced management team will also help persuade investors.

Key criteria

The investor will then review the company as an investment opportunity according to a list of key criteria. This list will include the following…

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