• Wednesday, May 22, 2024
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Building investments worthy startups

Building investments worthy startups

Startups come into existence for the purpose of solving a particular problem in society. Every startup aims to be a worthy investment in the eyes of its potential investors. A startup’s business end goal is to be valuable and have the ability to always connect to its end users.

What is a startup business?

A start-up is an entity that engages in the introduction of new products or services. It either creates a new market or paves into an existing market. The majority of the startups in the world are mainly technology-based. Only a few deal with industry-specific or retail markets.

A startup business tends to focus on bringing new, innovative procedures into the marketplace. Most startups seek funding through personal savings, crowdfunding from angel investors, or pre-seed funding.

In recent years, investing in startups has not been without its hitches. Smaller startups are beginning to close down their businesses and return investment funds to their investors after their inability to scale up in their few years of launching in the marketplace.

The pressure to build investment-worthy startups cannot be overemphasised. Startups must always focus on reliable new products or services, stable business policies, a good team, good financial projections, and a good business model that will always make it viable for investors and end users.

What are investment-worthy startups?

Investment-worthy startups are businesses that have been able to leverage their potential to become successful in a new or existing market. When investors invest in startups that are likely to scale up within a short time, they are likely to get a huge return on their investments. Investment-worthy startups have all the green flags in check, and they are likely to turn into large-scale sustainable businesses in the future.

How can one build an investment-worthy startup?

Develop the right new idea:

There are so many similar ideas in the marketplace, but when your business idea is the new sheriff in town, you should expect a higher return on investment. A startup founder should be able to create new ideas that can solve new pain points. The new idea should be workable.

Questions that should be asked before a startup can develop investment-worthy ideas are:

Has anyone ever been able to develop this unique idea?

Is this idea capable of being a good investment?

Will it serve its purpose?

Does it have a market for it?

Will this idea develop a new product or service that has never been invented before?

A startup founder should be able to understand the potential of his innovations. The idea should be able to create sustainable opportunities for the new business.

Hire a competent team:

A startup with the right expertise can have an advantage over its competitors. A good team will always look for ways to address challenges and diverse ways of providing customer needs without delays. A good team will always update innovations that will make the startup business a valuable asset to its investors.

Technology-based startups should always work with a team that can introduce cutting-edge technologies that will meet the demands of their end users. The startup team must develop a unique working culture that will ensure the business is accountable and compliant with regulations.

Check up with the account records:

A startup cannot be an investment-worthy startup if it can’t fix its money issues. The startup must always ensure that there are proper records of its finances at all times. Create record-keeping software that can monitor expenses and incoming revenue. Categorise each dollar spent on the business.

Have a good business model:

This is one of the best ways to identify if your startup is worthy of investment. A good business model is a comprehensive plan that identifies the market, the target customers, the cost of operations, and the source of income generation. An investor will only work with a startup that has a defined plan of operations. It shows the startup understands the kind of business it wants to operate.

Choose the right investor:

Not all investors are meant for your startup. Scout around until you find an investor that relates to your type of brand. Conduct due diligence on the potential investor.

Introduce a sustainable product or service:

Any product or service that will be introduced must be able to solve a new problem or limit the pain points customers undergo from utilising other products.

Building an investment-worthy startup is not a walk in the park. A startup must be able to show that they are prepared to keep up with the standards of a functional, stable business that can bring in steady investments from investors.

Emmanuel Otori has over 10 years of experience working with 100 start-ups and SMEs across Nigeria. He has worked on the Growth and Employment (GEM) Project of the World Bank, GiZ, Consulted for businesses at the Abuja Enterprise Agency, Novustack, Splitspot and NITDA. He is the Chief Executive Officer at Abuja Data School.