What investors look for beyond financials: Management teamAlcor Mergers and Acquisitions Pvt Ltd
As a startup owner, you have started your own venture with a management team that worked hard for supporting your idea. You have made a memorable pitch for identifying size of potential market, and you might have achieved some interest of customer or the sale of products. However, at the time of presenting your company to investors, the main question is that while evaluating startups what investors look for. Although each and every investor or venture capital firm is not same but startup business owners must know should know how to review financial information like sales numbers, future goals, revenue, number of signups, and projections. And more importantly, they should know what to highlight beyond financials. Based on current scenario, it starts with the management team of your startup.
For an investor or venture capital firm, your management team is the major area for them to focus on. Leadership of an organization can either make or break the chance of executing and building a business plan, so your management team must have so many skills within product development, marketing, and operations. In one team where one member might have years of experience as senior manager while other have experience in operations management. With a team full of diverse experience people, your team might collaborate as well as understand the best utilization of each one’s skills. And your team must be passionate about not only your industry and its product but also check their egos for doing successful business.
Often, most of the investors and venture capital firms look for management team those ties to the industry. With profound relevant experience, the management team can understand the working of the industry and may easily segregate the potential disruption areas and business expansion opportunities. Often, such kinds of experiences provides an organization in channelizing unique relationships that enabled them to partner with industry leaders for another new business venture can access and showcase accomplished and well-known industry members within your team proffers social support proof for your new business venture.
On the other hand, those organizations which don’t have right management team, it becomes very difficult for the new business venture to scale up with at the need of time. In various cases, investors or venture capital firms might sit on the board or may be tapped for advice, although many don’t think of them as consultant of management mainly if they are big investors who are working with various startups at the same time. While reconstruction of an organization is possible and there is more possibility of gaining interest of investors’ along with strong management team.
Moreover, it has been observed that the bigger and stable consumer base your brand has, tougher the competitive advantage one will have at time of pitching to venture capital or investors. If you have a larger consumer base then it will serve as a proof for your company that it has greater impact on its target market. Often, investors and venture capital firms look for those organizations that can quickly grow and manage their business’ high scale of growth. The investors should also make sure that the company may generate considerable amount of profits beyond the idea of initial product with sufficient financial projections and a business plan that consists of multiple revenue sources.