Startup Funding Espresso -- How Do Investors Decide to Invest?
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.So, how do investors decide to commit to a startup investment? Entrepreneurs look at the opportunity in the deal. Investors look at the risk. There are two factors that help the investor decide to invest or not. The first is the worst-case scenario approach. They ask, \u201cWhat is the worst that can happen?\u201d Most oftentimes, the answer is, \u201cYou\u2019ll lose all your money.\u201d\xa0\xa0 Sometimes the answer is, \u201cYou could be in the deal for the next 10 years with very little return.\u201d If the investor can live with the worst case scenario then they move forward. The second is the reputation factor.\xa0\xa0 The investor will ask how this will impact their reputation. Many have a standing in the community and in their investor circle and they don\u2019t want to be seen as \u201cthe fool.\u201d If the deal turns out to be a dud or even goes sideways, their reputation takes a ding. The investor cares about reputation because it impacts how other investors treat them. In presenting your deal to an investor, consider how the investor will view the deal and its impact on them. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today.-----For more episodes from Investor Connect, please visit the site at: Check out our other podcasts here: For Investors check out: For Startups check out: For eGuides check out: For upcoming Events, check out For Feedback please contact info@tencapital.group