Here are 5 Reasons Why Investors Ignore Your Business

Securing funding could mean the difference between success and failure for many entrepreneurs. So many young, eager business owners walk into the room of investors with high hope and big dreams.

That’s assuming, of course, you can even get in the door.

For every entrepreneur who gets the chance to pitch their business, dozens more go unnoticed. Getting the attention of investors isn’t an easy road, but you’ve got to do it.

Today, we’re going to discuss five of the main reasons investors are ignoring your business. If you fall into any of these categories, make sure to fix the issue before landing another pitch. You don’t want to lose your shot because you ignored some simple advice.

An unproven business plan

Investors looking for an acceptable return on their investment, commensurate with the investment made, but you have to convince any investor that it is a wise decision to invest with you otherwise the finance will not be there.

Your business plan is your road-map which should clearly show your goals and direction to get from where you are now, with their initial investment, to where you want to be, by showing your investors a return.

“The most common business plans are written for investors, lenders and current employees. Know which one you’re targeting and write the plan with them in mind. For example, if you’re writing a plan for a potential investor, it needs to get to the point swiftly, as they don’t want to spend their time reading a long business plan full of irrelevant information. Provide informative ideas which will get them interested in your business. Don’t try to pack every piece of information into the plan, but just enough to make them want to meet with you to discuss your ideas in much more detail.”

-- Anna Morrish, Marketing Executive at DMC

The plan must be viable, professional and ensures that investors can see proof of your actual earnings before they commit. It should also include details of the expansion and growth plans for the business.

A saturated market

If your potential investors believe you have too many competitors and that you have not taken that into consideration first by offering something unique or exceptional, then they will not invest.

Market research on this very important aspect is essential and should be included as part of your overall business plan so that investors can see you have done your homework prior to getting to the stage of seeking financial investment in your company.

Growth issues

It is not enough to simply implement your business idea without any recourse to its future direction and potential for expansion. All businesses have to grow in order to stay profitable in a competitive market and that is what your investors are looking for.

“In the past underwhelming products could survive and thrive merely on distribution alone. A bad product, backed by a large television campaign and retail distribution, could find growth and profits for the company, regardless of quality. This is no longer the case. Today, mediocre products can still be launched in this way, but their longevity and returns quickly crash as word of mouth spreads and demand dries up faster than ever before.”

― Sean Ellis, Startup Growth Engines: Case Studies of How Today's Most Successful Startups Unlock Extraordinary Growth

Your investors do not want to put more time and money into your business to help it expand so they can get a return, so it is important that you are able to highlight this to them so they can consider the potential future profitability of your business. This is your responsibility and failure to address this in the early stages will also mean a failure to attract investors.

Your Team

A professional, cohesive front is what you need to present to investors every time. Any team that is less than united and fully aware of the business, its goals and direction are not what any investor wants to see and any doubts will only present a red flag.

It’s also an indication of your leadership capabilities. Investors want to see your ability to build and lead a team. They aren’t just investing in the idea, they’re investing in YOU. That means you need to bring your best foot forward and show them what you’ve got.

"Teamwork is the ability to work together toward a common vision, the ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results." -- Andrew Carnegie

A team that is flexible, totally committed to the business, and can adapt their expertise to the business needs is closer to the ideal you want to achieve.

You

Your business should be your passion and that depth of commitment should convey itself naturally to your investors. A weak approach will leave investors looking elsewhere for someone with more commitment and dedication to their business. Your investors need to know you have what it takes, not only for your business, but more importantly, to ensure they have no doubts and will achieve a good return on their investment.

When you take these aspects into consideration and ensure they have all been addressed, you will be on the much more solid ground to attract investors.

Conclusion

Your business deserves the best chance of survival, and for many that requires funding. Get out there and do your best. Align the pitch based on the points above and you’ll do great.