Five Reasons Why People Invest In Ideas
This article is written by Brian Malika, a Contributor Author at Startup Istanbul.
Yousef Hamidaddin leads the Innovative Solution Board, an initiative from the Foundation of HRH the Crown Prince of Jordan, and was previously the Chief Executive Officer of Oasis 500. His current focus is on developing funding models for startups and SME’s across the region to be launched this year, and creating innovative funds that can deliver the rebuilding requirements for distressed countries such as Syria, and Yemen.
Before even you think of what investors are looking for in an idea, you must understand that before even someone agrees to come on board and listen to your entrepreneurial idea then there must be some sort of resonance first.
The first signal that your innovative idea might be selected is not seen when an investor agrees to come and listen to your pitch. Some investors might just be friendly and if they have time agree to appear at your pitching session but in a real sense they have no intention at all to invest in your idea.
Therefore, to be on the safe side of increasing the prospects of receiving an investment offer, you must always ensure that your audience of investors for your pitch are interested or working alongside the areas concerning your innovative idea in the first place. This could be achieved when you do a background check on the work, history, goals, and values of all the potential investors in mind.
Ok, now that you have the picture of all the potential investors that you will approach in mind, the next big question is what makes investors make investment decisions?
Before I answer the above critical question in five different angles, I would love to further insist that investor interest are diverse due to the obvious fact that all the people are different. And even if an investor is totally focussed on making a profit, still they would be very concerned how that profit will be made by keenly analyzing all the steps in the pitch towards the ultimate goal of making the much-desired profits.
Therefore you may find that a business idea is uniquely placed to make make a profit within certain environments but still investors are not keen to put money in it. This is usually because such a start-up does not clearly showcase concrete plans to meet the goals of the investor even though the venture being proposed has potential.
Why Investors shout ‘’This is the one .’’
1. The Founders! Yes, the people asking for the money.
Believe it or not, your innovative idea can only convince potential investors to have a second thought on whether to partner with your start-up or not. But, its the competitiveness and prowess of the founders of a start-up that cement the confidence of potential investors to sign that partnership deal.
The above claim makes a lot of sense because no matter how innovative an idea is, it cannot implement itself. As such the success of an innovative business idea is largely determined by the people working on it.
Therefore be sure to have a strong team in place if you want your innovative business idea t increase the probability of getting an investment deal.
2. The Investment Environment your Operating In
Every investor is keen to connect the dots on how the particular industry that your business idea is focussing on has been fairing along the years.
Just because you have a game-changing idea does n’t guarantee that after pitching you will be called for the next meeting. Rather, the investors want to understand why your game-changing idea should be embraced in place of the current system of trade that is in place.
Investors are keen to connect the trend along your business line with the future of doing innovation.
Therefore, as much as you have a game-changing business idea, make sure that you can prove why the same idea stands out to be competitive against the status quo and what awaits in the future of innovation. This is because many investors are silently worried about the future so make sure you calm there fears.
3. What value are you offering ?
What are you offering through your business idea that is uniquely placed against other competitors in the field?
Some people call this the unique value proposition. All investors that you will be pitching to will be comparing your idea with others in the market and they want to see the difference in terms of value.
So next time you go to do a business pitch you must clearly and in few words talk of the unique benefit that you're bringing on board.
Otherwise, what's the point of pitching a business idea if everyone else is aware and doing it?
4. Soar High. Yes just be exceptional.
Now don’t confuse between being exceptional and showcasing the unique value proposition. Being exceptional revolves around the inventor of a business idea while the unique value proposition is tied to the special value of the idea on the table. That being the case, when you go to present, apart from showcasing how skilled you qualify in the matter at hand, you must also be energetic and arm yourself with personality skills, emotional intelligence and public speaking prowess to connect with the emotions of the audience of investors.
Being exceptional during your pitching ensures that investors don’t forget about you and a such they are set to remember your idea amongst many others when it comes to making the big decision at some point later on.
5. Go ahead and connect the negative reality in society to an opportunity
If you look around you will observe that there is so much negativity happening in society. From hunger and starvation to water scarcity or even pollution. Bad things are happening a lot in society. And as such everyone out there including investors wishes for positive changes and transformations to happen in society.
Therefore if you can think out of the box and connect your innovative business idea to solve a social menace, then you can be sure to win the hearts of investors easily. This is because its satisfying to investors o do good in society and make money out of it at the same time.