5 things investors really want and need to hear

Cobee, the Spanish success story, is a startup launched in 2019 with the clear objective of revolutionizing employee benefit management.

At The Startup CFO, we are passionate about sharing good startup practices to help budding entrepreneurs on their journey to thrive and succeed. We specialise in providing CFO services for startups and we are going to share some tips to get the most out of your meetings with investors by understanding what they really want-and need-to hear from entrepreneurs.  Es clave que tengamos en cuenta que todos los inversores exigen informes y actualizaciones frecuentes sobre la salud de sus inversiones. Estas reuniones pueden ser intensas, pero también son una excelente oportunidad para demostrar su perspicacia y la estabilidad de su negocio. ¡Comencemos con las 5 claves!

Accelerated product market fit

Put simply, product market fit means being part of a relevant and successful market with a product that can satisfy that market. This means building a product or service that people want and desire and targeting it at the right audiences from an optimal platform. Bearing in mind that the first stage of the product market fit process is finding a problem/solution duo, you’ll need to ensure that you are meeting your USP and covering the needs and demands of the customers you want to reach. This leads into the second and third stages, which involve analysing if your startup is really meeting these needs and therefore achieving real product market fit. This is where the conversation with investors gets interesting, as the third stage focuses on scaling. Investors will be keen to know how you plan to accelerate growth. Investors will be keen to know how you plan to accelerate growth and continue to use this product market fit to expand and pivot, and this is even more relevant for early-stage startups. This point also highlights the reality of an investors’ role in understanding how your business and product works, rather than just figures.

Optimised Unit Economics  

Unit economics, in simple words, are the direct costs and revenues associated with a business model on a per-unit basis. In a SaaS environment like an app, this refers to the quantifiable value in terms of revenue per app subscriber per month. Investors will be keen to analyse unit economics and understand if your product is working as it should be. A careful analysis and conversation about unit economics answers key questions such as whether costs need to be streamlined or if the product itself can be optimised in any way to enhance subscription and uptake. Furthermore, investors understand that unit economics is a more solid way of forecasting profitability and understanding growth..

Understanding your cash flow

It’s important to remember that investors’ main priority is understanding the current health of your business and where it is headed, which is why you would do well to keep this fact in mind every time you attend a meeting with your board of investors. Investors are eager to know your cash flow position (reflected in accurate and professional reporting) in order to understand how the business can prepare for future road bumps and achieve an equilibrium in terms of costs. While most new business owners have a pool of money saved up to kickstart their enterprise, this tends to run out very quickly and cash is often drained in the first stages of launching and running a startup. Therefore, investors will want a clear understanding of how you are managing your cash and how this can -if necessary- be optimised in order to better manage expenses while revenue is scaled up.

Is the investment being used wisely?

This might seem like a no-brainer, but investors will want to know if entrepreneurs have the right outlook and foresight when it comes to the spending of their investment. Here, it all comes down to putting emphasis on how you optimise and guide your spending for the acceleration of the business and in order to best optimise investment. However, the most important point here is demonstrating to investors that you have enough capital to reach your next milestone, and raise further investment in the future. As well as demonstrating your business acumen, this point requires excellent reporting.

Metrics and reporting

As we’ve already seen, one of the first things investors look for is a set of reports and figures they can understand and use as a reference to your startup’s forecasts, progress and potential for scaling up in the future. In many cases, entrepreneurs in the early stage of launching their startup are exceptionally busy and forget about the importance of efficient and accurate reporting.

At The Startup CFO, we use our vast experience working with diverse early-stage startups to provide worry-free and optimized reporting which is designed to be easily legible and tailored to the requirements of your business and your investors. Additionally, our service provides an integrated approach to external CFO services, providing guidance for your pitches, meetings with investors and invaluable networking.

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