Although you will definitely require a respectable business plan to attract investors, the plan by itself will never be enough to get any investors interested. The decision for any kind of interested investment will rely on some other factors, like:
- The record of performance of the business team
- What product or service is it that you wish to sell?
- What competitive edge do you possess?
- And what kind of market will you be operating in?
The plan is somewhat similar to a car engine–the car won’t be able to go anywhere at all without it. But the engine by itself isn’t enough to make the car move and you will definitely need to understand this right from the beginning.
Remember That Not Every Investor Is the Same
Another important factor to understand is that not all investors are of a similar type. In the top section, there are a couple of thousand venture capitalists who are working for only a couple of hundred venture capital firms. Whereas at the bottom end of the spectrum, there are friends and relatives.
And right there in the middle part are many thousands of private investors, who are referred to as “angels.” All may be interested in the positive benefits of investing in penthouses for sale in Abu Dhabi, to their advantage.
Only an Introduction Would Do For Some Types
The venture capitalists are certainly the most exacting and only fund maybe 2 -3 thousand plans per year, and must lessen their risks because of their investing of other people’s moneys. They typically wouldn’t bother looking at a venture unless you have been introduced to them, due to having no way of screening and processing any proposals which they obtain.
If they did look out for any investment vehicles, they look for:
- A management team with a perfect track record, meaning they won’t fund your idea because of a lack of experience, but you don’t have the experience because they won’t fund your plan! That Catch 22 book/film comes to mind! In which case, look out for angel investors or relatives and friends
- A service or product with a leading edge. It’s not difficult to guess on the success of a product than it is of a service, which is why service businesses are not so interesting to any venture capitalists. (There are the odd exceptions)
More things which would appeal include:
- The opportunity to increase the value of the business from what they think it is currently worth, to about 100 times that in around three to five years.
- Any plan which already has similar investors ready to invest at the same time. Venture capitalists enjoy safety in numbers so that they aren’t alone in the race.
- A defined exit plan. Every investor likes to see one that you’ve planned ahead so they know how they will get their funds back.
Hope that helps and good luck!