your password has been reset successfully, Please login again.

4 Reasons Why Investors Won’t Invest In Your Business Model

Approaching the private equity firms or investors and persuading them in the most daunting task for businesses
BY Jaspreet Kaur
Feature Writer, BusinessEx
Feb 27,2019

For raising the business, financial capital is the utmost important thing for entrepreneurs. Besides personal savings, the monetary support from outsiders has also required if the business has a high-budget. Approaching the private equity firms or investors and persuading them in the most daunting task for businesses.

Building Confidence

An entrepreneur needs to become a marketer and even, solicitor to grab eyes in the market. Seeking investment is a time-consuming job which takes a lot to build investors’ confidence in the startup.

Originally, there is a prevailing methodology to seek investment—exhibiting a physical business, showcasing the cash flow, placing monetary needs of the Startup and create a strategy to attain the desired aim. Nevertheless, there are multiple blocks in actualizing the investment proposals as well.

These hindrances are aplenty for beginners. Recognizing these problems beforehand is imperative as it helps to tackle and jump off the hurdles.

  1. Fail To Foresee The Future

Private equity firms scrutinize new entrepreneurs at a moderate level. Primarily, a startup’s potential is released from the bright envision it carries. So, besides expanding the business reach, there are should be set goals which will solidify a startup’s profile.

If an entrepreneur does not create aims for the span of the next 10 years, then it seems inapt to endow money in the venture. Coming up with a unique or disruptive idea is not imperative; it is vital as to how a business owner executes the plan and mould an emerging, nascent company out of it.

The entrepreneurs, who lose this vision or get diverged by the money factor, fail to build concrete foundations of the business.

  1. Improper Cash Flows

Cash flows are eminent for showcasing the financial soundness of the business. While submitting the cash flow reports to major private equity firms, entrepreneurs need to exhibit a true picture of the startup. Manipulating the figures or acting like a pompous businessman does not help the startup owner in any way.

Investors are veterans in the industry and thus, possess the expertise to foresee future course of any business. Hence, business owners should demonstrate themselves as needful.

 

 

  1. The Enormous Size Of C-Suite Executives

Small companies need to take smaller, thoughtful steps in the market. Besides considering financial decisions, companies should also consider while formulating C-level designations. If the company does not have well-sounding CEOs or founders or Chairmen, then the stability of the company can be risky in the long run.

Companies with more than two founders or Chairmen are not impressive in their profile to the investors. Investing in such companies involve a huge risk and uncertainty in terms of their longevity. As a result, startups with more founders or chairmen are turned down by private equity firms.         

  1. Inability To Understand The Competitors

Recognizing competitors is vitally important for a growing business. Otherwise, the startup will be sooner pitted in the race. While exhibiting attributes of the business, it is imperative to contrast with the prevalent companies in the domain. Through this, entrepreneurs can show their companies worth and why they need to be backed up by investors.

Failing to understand the competitors or underestimating adversaries is considered improper attitude for emerging business owners. It is essential to know the competition and accordingly come out with tactics to keep the company ahead in the race.

Understanding these mistakes is important as these are some common metrics employed by investors to examine a startup’s potential. The business owners should further avoid these mistakes by planning strategized moves to entice funders and investors.    

   

    

 

 

    

 

Please add your Comment
SIMILAR Articles
November 12, 2019
By switching to privatization mode in state-run oil companies, this move alludes to another way to b ...More
By Jaspreet Kaur
November 12, 2019
In this move, the government proposes to offer INR 25 crore or 70 per cent of the project expenses f ...More
By Jaspreet Kaur
November 11, 2019
YourOwnRoom offers strategically located co-living and family homes to millennial tenants that are c ...More
By Jaspreet Kaur
November 08, 2019
Trailing the steps of Amazon and Flipkart, many small e-commerce players emerged in the market and g ...More
By Jaspreet Kaur
November 07, 2019
The joint venture, Maruti Suzuki Toyotsu India Private Limited (MSTI), is formed between Maruti Suzu ...More
By Ritu Marya
November 06, 2019
In a bid to promote the startups, the Indian government has reportedly proposed to permit startup fi ...More
By Ritu Marya
November 05, 2019
Gradeup will utilize the funds to enhance its tech & product capabilities, diversify offerings and s ...More
By Jaspreet Kaur
November 04, 2019
BeYouPlus administers high-quality services and immensely surge footfalls at the clinic by ensuring ...More
By Jaspreet Kaur
November 02, 2019
The e-commerce giant, Amazon has partnered with Indian online movie ticketing firm, BookMyShow.  ...More
By Jaspreet Kaur
November 02, 2019
The capital will help Woovly increase its existing user base and boost product development. ...More
By Jaspreet Kaur
November 01, 2019
Smartworks offers customized-spaces to their enterprise clientele in four to six weeks, rendering a ...More
By Jaspreet Kaur
November 01, 2019
With this investment, Hyundai Motors and Kia Motors will be acquiring a minority stake in the parent ...More
By Jaspreet Kaur