5 Things to Highlight About Your Startup When Approaching Investors

blog Jun 27, 2023

Many investors feel swamped with pitches from eager startup founders vying for their attention and investment. The sheer volume of potential opportunities means investors need to make swift initial assessments to decide where to focus their time and resources. These quick decisions are typically made during the very first encounter, be it a LinkedIn profile glimpse, a quick scan of your startup's website, or that initial message or email you send their way. Understanding what key elements to spotlight can mean the difference between getting a closer look or being passed over in an instant. 

There are five key elements investors always look for in a startup, right from the outset. Let’s go over them quickly:

1. The Founding Team

An investor's first probe is into the founding team, focusing keenly on the lead founder. Did you score big with a previous startup? Do you hold an ace with some market expertise? Or, is it your charisma that's the winning card? Be ready to put your best foot forward and convince them that your team has got what it takes to lead your startup.

2. Market Opportunity: Is the Timing Right?

Investors expect a zoom-in on the market opportunity. They're trying to figure out if what you're building is worth their money in the present market context. 

3. Traction: How Much Ground Have You Covered?

Traction isn't confined to how developed your software is or how much revenue you've got rolling in. It can also refer to the strategic partnerships you've built. You need to convince them that you've got a strong start and there's potential for further growth.

4. Moats and Competitive Edge

The fourth point revolves around the startup's defenses against competitors, or what is often called 'moats.' These could be a patent, proprietary technology, first-mover advantage, niche expertise, or even a valuable business partnership. These 'moats' are what keep your competitors at bay, or give you a competitive advantage. 

5. Other Investors: Who's Jumped Onboard?

This point is actually the most important one. Investors generally prefer to follow other investors than to take the lead. This is also more efficient, as it means someone already did some diligence that they might rely on.
If other investors have already put their money into your startup, you're more likely to gain new investors' confidence. That's why securing those initial investments, even from friends and family, can be so difficult. If you have several investors already highlight the most famous or prominent ones. 

The 5 Points You Need to Highlight to Investors Upfront:

In short, to get your foot in the door, you'll want to make sure these five points are front and center when you pitch:

  •  The strength and expertise of your founding team
  •  The market opportunity and why your startup is poised to seize it
  •  The traction you've achieved thus far
  •  The 'moats' that protect you from the competition
  •  The presence of other investors who've backed your startup

If you've got all five points covered, use them to your advantage. Highlight them in your pitch right off the bat. If you've only got a few, zero in on those and make them as compelling as possible. Highlighting your strengths like that will improve your chance of moving to the next step and having a more detailed discussion with the investor you reached out to. 

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