Whether you’re a startup looking for an investor to help you launch your business, or a small business owner needing financial assistance to expand your product line, you should know the 3 essential aspects potential investors look at in a company before deciding to invest.
1. Gross Margin
Before you approach any investor, make sure that you know what your gross margin is and that your number looks good. No one would invest into a product that yields little to no gross margin.
The reason why brand valuation is so important is because buyers tend to buy more from a company with an established brand. This means that marketing of new products will no longer cost you much if you’re already a known brand, thus making it easier for you to expand and grow your business.
And if your business has good branding strategy, you’ll have higher chances of getting your brand known. This is why angel investors also evaluate the brand strength of the company they’re interested in.
Costumer surveys, media presence, and third-party are just some of the metrics used by investors to measure brand strength.
Investors are investing as much in leadership as they are in the product or company. This means that your company needs to have a CEO whom you believe in. Well, if you’re the CEO of the company, then that’s already a given. All you need to do now is to convince investors that you believe in your product, your passion for your job, and you have what it takes to persevere.
This article is no way comprehensive but it does give you a little idea of how investors valuate a business. So, the next time you look for an investment from someone, make sure that you’ve laid out a pitch highlighting at least the 3 areas mentioned above.
Over to you..
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