9 Shocking Reasons Investors are Not Funding your Startup

Are you tired of your boss and the entrepreneur in you thinking you have a brilliant idea enough to have a startup? Then, be your own boss. However, every business requires capital. So, unless you have enough money in the bank, you need investors in funding your startup to make your product and service idea a reality.

Whatever your startup’s level, you need cash to kick start and keep the operations going. You’ll need it until it grows into a thriving enterprise. Yet, nobody is calling back despite approaching a long list of investors for funding your startup. So what could you be doing wrong?

You lack market research.

You need to prove your startup can earn money, and the investments can grow. Despite a visionary idea, you must have evidence showing your target consumers will value your business. Investing is like betting. Investors have to play it safe as much as possible. Make them believe your product is worth it through market research which involves your target consumer’s opinions, reflected research, and a systemic interpretation. And how can you apply this to your business process and products? A good business strategy makes research an essential part.

There are a lot of research firms in Singapore. Here are the top 5 according to Focus Singapore.

Acorn Marketing and Research Consultants Pte Ltd

ACORN is an independent Asian-based research company operating since 1985 to help entrepreneurs understand their target consumers. The company specialises in insightful marketing statistics, brand and product positioning, tracing marketing efficacy, configuration and other related streams.

Agility Research and Strategy

Agility Research and Strategy is a research and consulting company focusing on Affluent and Luxury Consumers. The company believes that Affluent consumers have the buying power. As a result, it can actually affect brands and demands in travel, healthcare, financial services, home and personal technology, and shopping.

AXANTEUS Research

AXANTEUS Research is a Singapore based information, data and research consultancy service provider in the global market.

Kadence International Ltd

Founded in 1992, Kadence International Ltd is an independent full-service market research company based in Singapore. In addition, it works with international marketing analytic organisations.

Asian Strategies Pvt Ltd

Asian Strategies has been in business since 1991, with its firm located in Singapore. Its board members have more than 60 years of experience in market research.

If you use trusted research firms in Singapore, your data will be more credible in the eyes of the investors. However, if you currently lack funds for research, you can do surveys yourself. But, it won’t be easy as it involves various research applications.

You have no pre-orders for funding your startup.

It is understandable if the investors are cynical. You must show them that you already have consumers interested in your products and services even before launching. It serves as proof that you are diligent with your business. But the real question is, how to get pre-orders?

Approach your friends and families. Tap into their other circles of friends. In addition, they can even vouch for you. However, do not overdo it. Or else, it will seem to be a mere fabrication. Instead, it is better to back up your list with marketing research. This way, investors won’t think twice about funding your startup. 

You can’t focus on a single product.

Even though you possibly have a lot of product ideas, it is better to keep track of just one. You are a startup. Therefore, you are still building your credibility that you can indeed sell to consumers. You can’t afford to be all over the place. You may not please everybody. But, it is more important to please the right target consumers.

No marketing strategy for funding your startup

It is essential to focus on developing your product or service as previously sighted. Yet, you should not lose sight of your marketing strategy. Why? It will be the key to bringing in a large number of consumers. Despite having a good product, you have no market if nobody knows it exists. Let the investors know how you will reach out to your consumers.

You are talking to the wrong investors.

Investors have different fields. Therefore, they are more likely to invest in the area of their expertise. In addition, investing involves financial risks. That’s why it is a must to lessen this. Usually, look for funding your startup with industries they are more familiar with.

Nobody refers you

The mails and e-mails you send to prospective investors will usually end in the trash. Sadly, it is true if they have no idea who you are. So instead, find someone who can refer you to potential investors.

You don’t flash your team’s credentials.

There is a reason you have handpicked a team to support your startup. They could have a track record of established reputation, a couple of known successes, awards or valuable skills. Find your team’s credentials and flaunt them to your investors. Instead, investors would fund exceptional talents with a still-developing idea rather than on a priceless idea backed by a team with questionable skills. If you don’t have any credentials yet to take pride in, you can use your partner’s.

Detailed presentation

The more you show to the investors, the more question they will have as they will see cracks through your business strategies and process. So give them what they need to know about your business. But never fabricate just to sound credible.

How to Present your Startup

Make it clear that you know what the investors exactly expect to acquire.

You should make your investors know that you understand what they want, which is earning from your business. Show your business strategies most simply. If they ask for the same product, then that is the only time you should show them a prototype.

Layout your expenditure to show how they will spend their money.

Show transparency when it comes to finances by showing your budget in detail. It is essential that the investors can see where their money is going. In addition, they check if you are a wise spender. Identify project milestones and outline the work schedules. Know that they scrutinise your specific action plan rather than the actual business idea.

Think ‘lean.’

Ask for the minimum amount of resources enough to cover the current phase of the action plan to get to the next one. Do not expect the investors to give you cash to cover the whole business operations. Just make sure that you keep the initiative to update them every phase you complete regularly.

After the presentation:

Get in touch with each investor and ask for feedback.

Show that you value your investors by personally asking them for any input. Be ready to accept criticism and show them how you reflect this to your business process.

Be patient. Give around a few weeks to think about your proposal.

Some investors spend a week to months before they say their decision. Be patient and remember that these investors are still watching your progress despite a negative answer. If they see positive results, they are more likely to invest the next time you approach them.

Unclear Exit Strategy

There will be a time when investors have to withdraw their investments together with interest. As early as possible, present your strategic plans to maximise your profits. Show the layout of your timetable. Also, demonstrate that you understand how much time you have to return the investment and how much they expect to get from you.

Getting investors takes time. If you want to jump-start your startup now, you need more capital. Cash Mart can help you by funding your startup business loans. Drop by Cash Mart’s office at Balestier Road and chat with the friendly staff.  Cash Mart, a reputable lender, guarantees to have a loan fit personally for your needs.