5 Things Investors Look Out For When Investing In Startups

yourstory-Investors-look-before-investing-in-startups.jpg

 Investing in start-ups is not an easy task. Investors have to think about the risks and long term investment factors before investing. The process is not for the meek, as most experienced investors tend to be smart, sceptical and thorough in reviewing opportunities presented to them. Despite the amount of start-ups they may see, the truth of the matter is that there are several boxes that just about every investor likes to check before they'll invest, either money or additional time.

Listed down are some important factors that investors look for before investing:

1.       MARKET SIZE: Any investor obviously would like to make profit, hence they want to be sure about the market size and the style of approach of the start-up they are investing in. The first question any Investor would ask is “how big is the market size?” Big is defined in terms of not just today, but the future as well. Investors look for ventures that can achieve huge profits with decent financial projections and maintains its impact on the targeted market.

2.       A STRONG MANAGEMENT TEAM: The second thing Investors will look out for in a start-up is the team, a credible and an established management team who are capable enough of delivering goals, executing business plan and handling responsibilities as they believe in strong work-force & execution rather than just sweet thoughts. A potential investor will attentively look into why your team is well positioned to build and execute a plan and become a market leader. What kind of domain expertise does the team have that makes them an authoritative figure in the market? Does the team have complementary skills as it related to sales and marketing, product development and operations? Is there a strong chemistry on the team and does everyone play nicely with each other?A good Investor want to know if the team is uniquely positioned to execute, Why this team, why now, why can you do this better than anyone else? What unfair advantage do you have over the market? Investors value fresh ideas and innovations but they also know that to execute them well, a skilled and experienced workforce is needed.

3.       EXPERIENCE: Investors particularly look for highly experienced entrepreneurs as they believe these entrepreneurs know how to minimize risks related to start-ups. Maximum investors take interest in those start-ups which have experience of high performance and executing correct business plan so that they can turn their investment into their expected ROI.

4.       BUSINESS MODEL RISK:  To de-risk investment opportunities, Investors like to see a product that is new and disruptive. For example, in a market like Nigeria’s, recession-proof products and products that are not foreign exchange dependent are more investment friendly. Investors want to see something simple that works and meets the current need of the target consumer. Essentially, the investor is thinking can this business make money in the proposed manner.

5.       THE SPICE: There's always a clicking moment that happens between an investor and a founder that plays in the investment decision. Sometimes it is easy to identify an affinity based on a common background, such as shared work or educational experiences or perhaps a co-investor that's mutually known and trusted. In other cases, it could be likeability of the entrepreneur, or merely an instinct or impression that the investor develops, good or bad. Either way, this is where it helps for start-ups to be authentic and not too salesy while understanding the personal background of the investor to tease out any positive connections out of a conversation. Keep in mind, even if you don't land a check quickly, you have paved the way for a second meeting.

 

We are committed to supporting the next generation of African Innovators. To get tips on how to be a great investor in the African Tech Ecosystem, log on to our website www.ingressivecapital.com & www.ingressive.co.

 

If this article has been helpful, be a part of the conversation and let’s go social! Follow us on Facebook, Twitter, Instagram & LinkedIn

Digital Leadership: Going Beyond Viral

Digital Leadership: Going Beyond Viral

The Leadership & Business Development for Youths in Lagos State program celebrated it’s third year with a commemorative event on June 30th at the IBM Innovation Center. CitiBank sponsored a program designed to train and create employment opportunities for youths in Lagos State. For the last three years, the Growing Business Foundation has led this program, training young men and women from all over the city. 

Intellectual Property Rights: Who Owns Your Dream?

Intellectual Property Rights: Who Owns Your Dream?

Intellectual Property (IP) Rights was the subject matter of the third installment of Ingressive’s monthly Ecosystem Hangout. The question posed to the attendees was “Who Owns Your Dream?” The question was important for several reasons. In business it’s near impossible to do it all alone; understanding Intellectual Property Rights is one of the best ways to protect your ideas. We are forced to share integral pieces of our dream to execute objectives and create profitable partnerships. It’s important for any savvy entrepreneur to learn what to say, when to say it, and who to say it to. By arming Techpreneurs with this type of information, the result creates a developer or designer with the ability to create innovation from scratch and the business acumen to ensure the venture is profitable.

Cloud Computing with Github. The tale of an Ingressive event 2.0.

Cloud Computing with Github. The tale of an Ingressive event 2.0.

The Ingressive ambassadors at the University of Port Harcourt hosted an event sponsored by Ingressive and Github titled “Cloud Computing with Github”.

It started at around 11:30 am with Obusor, an Ingressive ambassador giving his presentation on Github pages. It then proceeded with a session from Theodora Isola, (a technical writer @nodejsAfrica and an IT strategist at Tiva creatives) on The role of Github in Cloud computing. 

Figma Campus 1.0 — Design Empathy

Figma Campus 1.0 — Design Empathy

What do designers do when they gather? They compose themselves. 😁

It was a bright and sunny Wednesday afternoon in Rivers State University, and designers (and design enthusiasts) have converged at the Computer Science Laboratory, the venue for the first Figma Design meet-up on campus. The call that brought out the creatives had been put out some weeks ago and they’ve all shown up with one common expectation; that they’ll better understand what it means to be empathetic designers. And so they did…

Kwarapoly Ingressive Campus Meetup 3.0: As it happened

Kwarapoly Ingressive Campus Meetup 3.0: As it happened

June 2, 2018 was a great day at MAL Hub, a beautiful day to always remember in the history of Kwaran students, another day developers from various campuses united to learn about Problem Solving skills of Great Software Developers Using Github.

The event was a great success, with over 81 developers from different institutions across Kwara State in attendance. It was indeed a great privilege for many developers as they acquire knowledge that can help them improve their skills as a world class developer. It featured four amazing speakers.

Tech For All: Building an Inclusive Ingressive Lautech Campus Community

Tech For All: Building an Inclusive Ingressive Lautech Campus Community

…“Did we achieve it?” have we succeeded in creating an inclusive community where everyone is welcomed, where nothing else matters but pushing each other to become the best they can be? I would have loved to spontaneously reply with an affirmative, Yes we did it!, but it takes more than one meetup to achieve this, but the foundation we have built is solid, and we are not afraid to build a castle on it.

FUTM X Ingressive Campus Meetup "The Maiden Edition"

FUTM X Ingressive Campus Meetup "The Maiden Edition"

The 21st of April, 2018 was another great day at Federal University of Technology Minna, Niger State. There was such a gathering of enthusiasts at the maiden edition of the FUTMX Ingressive Community meet-up. And as usual they gathered to share ideas, this time on how to network, learn and innovate. Ingressive is a tech firm that believe in the potential of African youths and have been working tirelessly to promote tech ecosystem in Africa.

Open Source: Investment’s Hidden Gem

Open Source: Investment’s Hidden Gem

On February 24th, 2018; Ingressive paired with Rising Tide Africa to present a course designed to highlight the intersection of two opposing ideas. We introduced open source, platforms where developers openly share the software they built for others to use and build upon for free. Then we taught our followers how to monetize it. Yes, taking something that is as free as the air we breathe and use it as an investment strategy, an entrepreneurial growth hack, or a money-making venture. Either it’s too good to be true or you missed out…

DevOps: THE NEW BLACK

DevOps: THE NEW BLACK

You’d had to be remotely remote, if you didn’t notice the explosion of DevOps as well as DevSecOps over the years. With it’s increased popularity there has been a lot of questions asked, questions like, “what really is DevOps?”. This event was targeted at introducing DevOps to Babcock Varsity Ingressive Community, highlighting it’s importance, acquainted tools and services plus resources to kick start their DevOps career.

Codefest Nigeria 2018: An Awakening

Codefest Nigeria 2018: An Awakening

Codefest Nigeria is where ideas meet technology to create unique products for enterprises. The flagship program of Codefest Nigeria is the Codefest 2018 Annual Hackathon. Their software coding and application contest takes place between higher institutions and NYSC members. These teams came together to use technology to transform ideas into reality. This hackathon was made possible by the Codefest Nigeria team, partners, sponsors, and Angels. Notably, the CEO of Basscomm Group, Mr Demola Onanuga, keyed into the vision and pushed it further.

How Ingressive Is Contributing To The Tech Ecosystem In Kwara State

How Ingressive Is Contributing To The Tech Ecosystem In Kwara State

March 24th, 2018 was another great day at Mal Hub as Ingressive Tech Firm continue to empower the youths of Kwara State in becoming world class developers. As at last meet-up, which was also a huge impact in developing the skills of developers in our community, when lot of topics were discussed relating to how Github can be use to enhance projects workflow.

Many startups in Ghana are inspired by all but one thing: DATA

Many startups in Ghana are inspired by all but one thing: DATA

Hello there. Take a pause. Set a timer for 60 seconds and simply do nothing -- just gaze into the vast expanse of the universe.

This simple experiment may seem like child’s play but in that time span, an immense volume of data has already been generated. Within that minute, your heart beat 70 times and your lungs have inhaled and exhaled over 8 litres of air. Almost 47,000 photos have been posted on Instagram, over 103 million spam emails have been sent and 3.5 million Google searches have been conducted around the world.

Finding Wakanda

Finding Wakanda

It is very difficult for many social media users to scroll without coming across movie poster selfies and comic book historian dissertations on The Black Panther. Even six weeks later timelines are splashed daily with images of fans with arms crossing their chests, a foreboding expression, and the new mantra #WakandaForever. However; when considering the viral nature of The Black Panther and the movie netting $900 million in global ticket sales; we may be witnessing a shift in perception.

A Tale of Two Halves: Ghana's Tech Entrepreneurship Journey

A Tale of Two Halves: Ghana's Tech Entrepreneurship Journey

Inspired by the young and ambitious survivors of the Dot-Com bubble in the West, the young Ghanaian techies were determined to leave their mark in history. The race to be a billionaire by 30 was on. The entire ecosystem is filled with hope and optimism. Many tech-enabled “youngins” channeled their efforts into desktop-based client-to-server applications. Pioneers like Herman Chinery-Hesse, co-founder of the SOFTtribe, perhaps Ghana’s largest tech company in 1991, left a cozy life in the UK to nurture and groom many of these dream chasers.