3 BIGGEST Red Flags Investors See In Companies
Updated: Apr 26
Investor prep is one of the most crucial parts in business development, and plays a huge role in whether or not a company ends up landing investment funds. Having much experience in helping companies prepare for investors, we have compiled a list of the 3 BIGGEST Red Flags Investors see in most companies.
No Product Testing or Proof Of Concept
Before any investor will give out any sort of funding, they want to see that your business model actually makes money. If your product or service isn’t market tested and has shown some success and ability to grow, your chances of getting funding significantly decrease to almost no chance.
Poorly Organized/Designed Pitch Deck
If you are trying to attract investors to your company, you want to make your company look attractive, even with your pitch deck. A poorly designed pitch deck might show a lack of innovation and creativity to investors that may be a bad reflection of your company. Aside from your pitch deck being visually appealing, it must be easy to understand as well. If your pitch is too long and drawn out, you’ll likely lose the attention of the investor. You want to make sure you are brief and to the point, while still covering all the bases of your business/business model, making it easy to digest for investors.
Poor/No Explanation of How Funds Will Be Used
Investors want to feel confident on their ROI, no investor will give you money without a thorough explanation of how it will be used to generate profits for both parties. If you can’t show them that your idea/venture will be able to generate profits for their financial investments, your chances of getting funding are slim to none. The best thing that you can show investors is that your business is profitable, this will significantly increase your chances of gaining investments and growing your business.
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