Three Vital Factors to Consider While Choosing a Startup Investor

Whereas funding is known as the lifeblood of businesses, market research shows one of the leading causes that startup fails in the US is the shortage of capital and cash flow. Although black men, women, and minority startups are more industrious than their white counterparts, it is scary that a negligible percentage of new black businesses get off the ground due to lack of capital structure, deficient support, the reluctance of white-owned banks in financing them. Hence, if you’re among those startup entrepreneurs struggling due to the much-required venture capital and other supports, an ideal option for you is to work with a startup investor.

While choosing the right investor is the key that supports you in all respects far beyond funding that adds value to your startup and lets it flourish within a short span of period, finding a dependable one is quite challenging. Following are the three vital factors to consider when screening and finding the desired investor for your company:

Background/Experience

Be patient to diligently research the background of the startup investor, its proven track record of investing in SMBs and startup enterprises that have become thriving in their endeavors. Apart from funding, having in-depth experience in the industry is essential that makes them priceless investors and guides. Make sure that the community is liberal, hates racial discrimination, working with black businesses and assisting them to grow and fly on their wings.
 
Trustworthiness

The integrity of your investor is an essential factor that you must ensure before joining the group. Simply put, you are about to share your business's confidential information and hence, the startup investor you work with should be trusted enough to keep that information secured and secret. Joining an investor that also performs as a startup studio is a fantastic choice because not only does it support you in arranging venture capital but works as your business advisor and associate.
 
Support

Just as we stated above that working with a startup studio is a matchless choice because they play the role of an ultimate solution provider for startup groups. Look for one that supports you with

•    Co-working Space: Coworking space is a great alternative to working from your residence. By paying minimal rentals you can have access to workspaces located in the city center, where you can hardly afford to rent an office. Your startup investor will offer multiple facilities ranging from separate desks, chairs, 5G hi-fi connection, receptionist assistance, mail receipt, and delivery system, etc. i.e. a complete office ecosystem for a startup to flourish.

•    Business Ideas: Did you know that other than funding, one leading cause behind startup collapse is pursuing a wrong business model? Perhaps the biggest advantage of joining a startup investor is that before they invest, they sit you, understand your business model, evaluate its market potential, and if you are on the wrong path, it supports you to access the hottest business ideas along with strategic guidelines to make your venture successful.

•    Talent Pool: Reputable startup investors also support small businesses with a talent pool if needed. For instance, if you’re involved in software or engineering business, but lack in terms of expert manpower - they can back up your business with product designers, software developers, admin staff, and marketing professionals to ensure your success.

Conclusion

When assessing the uprightness of your investors, ask them various questions about prior investments, what their success rate is, and obviously what their expectation is from your business like professional fees, etc, and if you feel confident, never delay to get started.