What are investors looking for?

Investors are like judges. They have a set of expectations, and specific things they want delivered if they are going to give you a perfect score. An Olympic diver wouldn’t dream of going into a competition without a comprehensive understanding of what the judges are looking for. They’d be throwing away the competition. Similarly, as a company looking to raise capital, you’d be at a serious disadvantage if you didn’t do the same.  

So how do they judge?

In due diligence, investors are judging to assess the level of risk and opportunity in your business. They do this by understanding your potential – your vision and your level of clarity, capacity and capability to execute it.  

They’ll be judging:

You: Who are you (and all your co-founders)? What has shaped you? What’s driving you? What are your superpowers?

Your vision: Who does it serve? What problems does it solve? How much value could it create?

Your strategy: Clarity on the risks & challenges to solve, along with a clear, differentiated point of view that supports coherent methods and actions

Your plan/model: The set of coherent methods and actions that deploy funds raised to solve the challenge, deliver value contained in the vision, and minimize risk.

Your measures: What are your measures and how clearly attributable are they to methods and actions that execute the strategy?

Your foundations: The funds required, terms, structure and legal agreements in place that will either support or hinder their desired investment criteria and execution of the strategy.  

Alignment is key

Most importantly, your investors are judging whether all of these factors align and support one another. If even one element is unclear or out of sync with the rest, the whole process can unravel. Just as the divers are perfectly synchronized, so you and your co-founders need to be 100% on the same page.