Expectations of any investor, irrespective of the fact whether they belong from Pakistan or not, have one aim and that is to get a return on the investment that they have made as soon as possible. However, giving the expected return to the investors is only possible when the business model of the start-up starts working in a place and starts earning profit. This usually does not happen very soon but that is understandable for most investors. Investors are usually looking forward to meeting a financial goal and therefore, before investing in a start-up, they look forward to a few critical aspects of the start-up. Here is a list of a few such elements that the investors are expecting from the start-ups of Pakistan.
1. Financial performance of the start-up
The sole aim of most investors is to make money as soon as possible. Before they invest in a start-up, it needs to be shown to them that the company has the potential to make money for the start-ups. Whether the start-up is capable of making money for the investors or not is usually decided by analyzing the financial performance of the start-up.
2. Solid business plan
Any business will run on a business plan and for a start-up, business plans are very vital at every stage. Whether the founders are serious or not about the start-up is usually analyzed by the investors through the business plan. For instance, if a designer is starting a start-up, the investors might raise questions like how they plan to market their Mehndi Designs. Also, by having a look at the business plan, the investors get an idea of how the start-up will work and whether it is solid enough to make money or not. Therefore, it is extremely important to have a rock-solid business plan.
3. Good narrative
Every day, investors hear plenty of pitches, along with other important data about the start-up. The question is if two start-ups are having nearly similar numbers and projects, whom will the investors choose? Well, the answer narrows down to the narrative. A strong narrative that can express the Love Status between the founders and the start-up usually wins. can win the hearts of the investors. It is important to back up the numbers or the reason why you started the start-up should have a strong narrative.
4. Unique products and services
There are many similar products and services flooding the market but if you look at it closely, you will find that each product or service, though similar, is kind of unique. Investors usually want to invest in unique products and investors. This fact is particularly true for the venture capitalists who look at the proprietary features and focus on the competitive advantage of the start-up.
5. Big market size
The return on investment can only be high when the start-up has a tremendous growth potential. Therefore, it is important for the investors that the start-up in which they want to invest has a significant market size that ensures the growth potential of the company. However, the investors are not looking forward to the worldwide market but it should be big enough that it leaves tremendous scope for increasing the margin and profit of the start-up.
6. The team
For any investor, the team of the start-up plays a critical role. The investors look at the skills and the experience of the team. Most of the time, the investors look at the founding members and other key members of the team. The domain experience of the team members is also checked by the investors before deciding whether they want to invest in a company or not. Additional things that the investors check are what motivates the founder in running the start-up and the plan of the founders to scale the team in the near future.
7. Terms and valuation of the financing round
Investors mostly look at the different terms and conditions along with the valuation of the financing round in the start-ups. Questions that the investors might raise before investing in a start-up like how much the start-up has raised, how much money is committed by the investors, if there are prior investors who will be participating in the round and if any well-known investor is leading the investment round.
These are a few of the factors that the investors of Pakistan will look forward to before investing in a start-up.