If you intend to secure external funding for your startup, you may consider seeking investment from angel investors. Angel investors are affluent individuals who provide capital for business startups in exchange for a share of ownership equity.
Angel investment serves as a first round of financing following initial seed funding from family and friends. Additionally, angels are often successful entrepreneurs, business executives, or attorneys who can offer management, leadership, and guidance to your startup.
This series of posts aims to provide insights into the criteria angels consider when investing in a startup. These posts will assist you in understanding an investor’s perspective and assessing whether they would be willing to invest $100,000 in your business. Utilize these posts as a tool to evaluate your business’s strengths and weaknesses.
Regarding funding options and methods, please refer to my post “Funding Your Start-up The Jugaad Way” for alternative and potentially less costly ways of raising capital. Regardless of your chosen funding path, it is imperative to prepare a well-crafted investment pitch that can significantly impact the success of your startup launch..
#8 Growth Potential
Most investors seek more than just a single success. They want to see if you can create a series of products and services that support and expand your initial concept. Consider Apple’s journey from a single-product computer startup to its current status as a multi-product, interconnected cross-platform lifestyle company.
Investors are drawn to start-ups with high growth potential, the ability to scale rapidly, and the potential to expand globally. Your company must demonstrate a plan to generate substantial profits beyond your initial product idea. Develop a strategy to generate multiple revenue streams by leveraging your existing concept.
Under Armor serves as an excellent example of product line expansion, innovation, and market potential. Starting with a synthetic undershirt for football players, they transformed into an international athletic clothing and equipment giant. In 2006, they capitalized on their market position by introducing football cleats, capturing a remarkable 23% market share within a single year. This exemplifies the growth potential.
To achieve this, examine the core of your product or service and understand its true value to your customers. From there, build upon what they might also appreciate related to your core product. For instance, to maintain its growth trajectory, could Under Armor develop a line of high-quality sports nutrition products like protein drinks? Or perhaps they could venture into the realm of innovative gyms or launch an international sports channel focused on professional sports not typically broadcast in the US?
Thrive Venture can assist you in refining your product, developing product lines, and creating growth plans based on product potential. Our marketing-based creative process is one of our areas of expertise and passion.
– Tyler, Founder and Principal Consultant
Thrive Venture Consulting—connecting people and ideas.