The startup culture in India has gained significant momentum and more investors are willing to put their money in new ventures.

While the idea behind a new business venture is important, there are several other aspects that investors examine before they decide to fund a startup.

Here are some key points that startups seeking funding should remember before approaching an investor:

Capable Team

More than the idea and the concept of the startup, the most important thing that the investors look at is the founding team members. Investors need to be convinced that the team is capable enough or has competent skill-sets to execute what they’re planning to do.

Most mature investors silently see the tuning, trust and loyalty between the team members as well. If they are investing in a team, they want a rock-solid one. So, I strongly suggest you only work with people you can spend your whole life with. It’s like looking for someone to get married to. You don’t want to take hasty decisions.

Investors also try to understand if you’re financially responsible. They’re going to give you an immense load of funds in your bank account to handle. One needs to have full faith that you won’t go rogue or maybe even have a heart attack after seeing too much money in your bank account.

Ask for the right amount

As an investor and a financial consultant to many wealthy individuals, you will be surprised if I tell you about the number of startups I see daily with great business ideas and asking for the wrong amount.

It is more dangerous to ask for a lesser amount than to ask for more than what you need. Founders need to pay themselves a decent salary as well. A startup needs to have enough funds in their bank to either reach a point where they’re profitable and can survive on their own now or can raise the next round of financing.

Roadmap

Fancy revenue projections of 3-5 years is a sham according to me. They don’t prove to be correct in more than 95% of cases. Very limited people can actually do it accurately for an early-stage startup.

So, according to my understanding, having a correct roadmap is more beneficial than just projections. An entrepreneur should focus more on “How will we achieve the target revenue?” than “We have xxx revenue projections for the coming 5 years, and we’ll be billionaires within 3 years.”

Monetisation strategy and scalability

You should have a fair idea about how will you monetise your offering. I personally don’t invest in startups where there is no ask for the product that you’re offering to people, and you secretly make people your primary product.

Data is king, they say. Companies doing this thing are incredibly successful, even I am their user (or you can call me a product for them). Most investors like the monetisation strategy, clearly defined.

You need to understand if your product is commercially viable or not and if people are willing to pay for it. The best thing is to just step out of your room and ask random people about it.

It sounds weird, but it always works. You should also have a fair idea about the scalability of your startup. Remember, the easier and bigger the scalability, the more investable it is.