Three Things Investors Look for in Online Start-Ups - dummies

Three Things Investors Look for in Online Start-Ups

Part of Successful Online Start-Ups For Dummies Cheat Sheet (Australian Edition)

When screening new online business start-up ideas, investors generally make a call whether or not to invite you in based on these three key factors:

  • Your revenue and users: Most investors are pretty bad at spotting trends before they become mainstream, so chances are they may not ‘get’ your idea at first. Don’t try to explain why your idea is great, instead show them some data. If you can show $1k revenue on your first day of trading or a staggering user growth rate (several 100 per cent), it doesn’t matter whether investors get your idea or not — the data is showing them exactly what they want to know.

  • Your target market: It’s simple. You need to target a multi-billion dollar market. Alternatively, if you’re opening a new market, demonstrate how it can grow to be worth more than a billion dollars. Investors will not look twice at you otherwise!

  • Your team: Make sure you have a good mix of skills and expertise in your team. All team members should be over-achievers in their various specialties. If any of you have a track record of previous start-up successes or failures, point these out in CVs or Profiles as part of your pitch.