10 Things Every Investor Looks for in a Deal
Dec 13, 2024
If you’re gearing up to raise capital, you know it’s not just about having a solid pitch or impressive projections. Investors are looking for something specific—a blend of opportunity, reliability, and potential that makes them feel confident enough to say, “I’m in.” But what exactly is on their checklist? What are they really looking for before committing their capital?
Let’s break down the top things every investor has on their radar. Nail these, and you’re a lot closer to getting that handshake.
1. A Compelling Value Proposition
First things first: investors need to see why this deal matters. They’re sifting through dozens, if not hundreds, of pitches, so your value proposition has to stand out. What makes this opportunity unique? Why is it a valuable move for them, especially right now?
➡️Be clear about what makes your deal different.
➡️Show market trends or demand that backs up your idea.
➡️Emphasize how this investment will bring value to them.
A strong value proposition isn’t just an introduction; it’s what gets them to lean in and start asking questions.
2. Real Market Potential
Even if you’ve got a fantastic idea, investors want to know there’s a real market for it. They’re looking for a growing market with room for your project to thrive. This is about more than numbers—it’s about understanding your position and where you can go.
➡️Use current market data to paint a picture of growth.
➡️Show why people want what you’re offering.
➡️Point out competitors and explain how you’re different.
Investors want to see where the momentum is—and how your project will ride that wave.
3. Solid Financial Projections
Let’s be honest: investors want to see the bottom line. And while you don’t need to have a crystal ball, your financial projections need to be realistic, clear, and promising.
➡️Include a 3-5 year revenue and profit outlook.
➡️Break down your costs and expected returns.
➡️Show a roadmap for how you’ll reach profitability and scale.
Ground your numbers in research, avoid the “hockey stick” projection, and let your research speak for itself.
4. Risk Management and Mitigation
Here’s the deal: investors know there’s no such thing as a risk-free investment. But they’re looking for people who understand the risks and have thought about how to handle them.
➡️Outline the major risks involved.
➡️Share strategies you have in place to mitigate these.
➡️Give real-world examples or data on similar challenges in your market.
Acknowledging risks shows you’re prepared and gives investors peace of mind.
5. A Strong, Reliable Team
Investors invest in people as much as ideas. They want to know that your team can deliver, no matter what comes up.
➡️Highlight key team members’ backgrounds and skills.
➡️Show what each person brings to the table.
➡️Mention any relevant past projects or successes.
A strong team reassures investors that their money is in capable hands.
6. A Competitive Edge
Whatever industry you’re in, competition is inevitable. Investors need to see why your project will stand out.
➡️Identify any unique assets or technology.
➡️Talk about strategic partnerships or market advantages.
➡️Emphasize why your approach is adaptable.
A competitive edge isn’t just about today’s market—it’s about showing that you can hold your ground as the market evolves.
7. A Clear Exit Strategy
One thing that’s easy to forget: investors want to know how they’ll eventually get their money out. They need to see an exit plan that aligns with their goals and timeline.
➡️Outline potential exit options like acquisitions or IPOs.
➡️Include a timeline for when an exit could happen.
➡️Explain how the market conditions could impact your exit plan.
Having a clear exit strategy shows that you’re thinking long-term—and that you’ve planned for their future as well as your own.
8. A Positive Track Record
If you’ve had success in the past, it’s time to bring it up. Investors want to see evidence that your strategies work.
➡️Include case studies of past projects.
➡️Share tangible results, metrics, or testimonials.
➡️Highlight any positive feedback from previous investors or clients.
If this is your first project, consider sharing the experience of advisors or mentors who are helping guide you.
9. Strong Networking and Partnerships
No project succeeds alone. Investors want to see who you know and how that network will benefit your project.
➡️Highlight partnerships and industry connections.
➡️Show how these connections will add value.
➡️Mention any strategic alliances that will aid in growth.
A strong network shows that you have support, resources, and the connections to scale effectively.
10. Transparency and Consistent Communication
Investors value honest and open communication. Trust is a cornerstone of any investment relationship, and investors need to know they’ll be kept in the loop.
➡️Outline your communication plan for updates.
➡️Show transparency in financial and operational aspects.
➡️Highlight any systems you have for investor relations.
Being transparent isn’t just about what you say—it’s about showing that investors can rely on you for the full picture, even when things aren’t perfect.
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The information contained herein is for general guidance on matters of interest only. This information contained herein is not intended to provide you with any advice on financial planning, investment, insurance, legal, accounting, tax or similar matters and should not be relied upon for such purposes. Marcin Drozdz, M1 Real Capital Inc are not financial, legal or tax advisers. You should assess whether you require such advisers and additional information and, where appropriate, seek independent professional advice. You understand this to be an expression of opinions and not professional advice. You are solely responsible for any actions you take with the content and hold Marcin Drozdz and M1 Real Capital Inc or any of it's affiliates harmless in any event or claim.
