How to increase a startup's chances of success: money, plan and investor confidence
Plan. Not for 3 years, but for 3 months
Investors don’t like fantasies. They look at specific steps and ask specific questions. When can we expect the first orders? What happens if the advertising doesn’t “work”? How quickly can we change the product? What is the breakeven point, when does the business “break even”? What metrics are critical? CAC, LTV, Burn Rate? Can you interest an investor in a minute?
A plan is a working tool that gives investors (and the founders themselves) an understanding of where the project is heading, at what stages resources will be needed, and what will happen if everything doesn’t go according to plan. It’s not necessary to write a 100-page business plan. You need a clear and flexible financial plan for 3–6 months and scenarios “A”, “B”, “C”.
Investors don’t like fantasies. They look at specific steps and ask specific questions. When can we expect the first orders? What happens if the advertising doesn’t “work”? How quickly can we change the product? What is the breakeven point, when does the business “break even”? What metrics are critical? CAC, LTV, Burn Rate? Can you interest an investor in a minute?
A plan is a working tool that gives investors (and the founders themselves) an understanding of where the project is heading, at what stages resources will be needed, and what will happen if everything doesn’t go according to plan. It’s not necessary to write a 100-page business plan. You need a clear and flexible financial plan for 3–6 months and scenarios “A”, “B”, “C”.
A good strategic plan should include:
The mistake of many startups is to show only rosy scenarios. In practice, the investor is interested in: "What if everything goes wrong?"
- a brief description of the business from the founder
- analysis of target and potential markets, trends
- customer research, creating audience profiles
- competitive analysis, understanding the strengths and weaknesses of the product
- assessment of current resources
- financial model
- hypotheses about possible risks
- action plan for the next 6 months
The mistake of many startups is to show only rosy scenarios. In practice, the investor is interested in: "What if everything goes wrong?"
A super idea without structure and clear steps turns business into chaos. Those who have a “million-dollar concept” do not survive and grow, but those who can calculate risks, plan, negotiate and build relationships wisely. Those who think two steps ahead. The rest burn out at the start.
A new business is not a marathon or a sprint. It is a debut in a chess game. If you make a mistake at the very beginning, it will be hard to win. Why do some startups grow, while others close after a year? LLC "EIFOS HUB" helps startups build strategies, finds reliable investors. We know why some succeed, while others fail.
Not everything is decided by your own money
American economists have studied the fates of 50 million (!) companies and have come to the conclusion that the most significant success factor is the amount of funding raised before the company is launched. The larger the start-up capital, the higher the probability that the company will become profitable and large-scale. In addition, the source of funding plays a key role: venture capital has proven to be the most effective. An important detail: if a startup is financed from its own funds, its chances of success decrease by 2-5%, but if third-party investments are attracted, on the contrary, they increase by 9-11%.
The phrase “we can handle it ourselves” sounds nice, but for a startup it can play a cruel joke. External funding — money raised from investors — is not just an additional resource, but an opportunity to hire, test, and develop. It is both an indicator of the viability of an idea and a signal to the market that the founder knows how to sell, inspire, and convince. The ability to attract investment is one of the key skills of a successful founder.
A new business is not a marathon or a sprint. It is a debut in a chess game. If you make a mistake at the very beginning, it will be hard to win. Why do some startups grow, while others close after a year? LLC "EIFOS HUB" helps startups build strategies, finds reliable investors. We know why some succeed, while others fail.
Not everything is decided by your own money
American economists have studied the fates of 50 million (!) companies and have come to the conclusion that the most significant success factor is the amount of funding raised before the company is launched. The larger the start-up capital, the higher the probability that the company will become profitable and large-scale. In addition, the source of funding plays a key role: venture capital has proven to be the most effective. An important detail: if a startup is financed from its own funds, its chances of success decrease by 2-5%, but if third-party investments are attracted, on the contrary, they increase by 9-11%.
The phrase “we can handle it ourselves” sounds nice, but for a startup it can play a cruel joke. External funding — money raised from investors — is not just an additional resource, but an opportunity to hire, test, and develop. It is both an indicator of the viability of an idea and a signal to the market that the founder knows how to sell, inspire, and convince. The ability to attract investment is one of the key skills of a successful founder.
What do investors want to see?
Almost any startup cannot develop for a long time solely on its own funds. Investors need to understand in advance when and for what they will need to allocate funds. For example, IT products - for scaling, biotech - for clinical trials. If a startup is developing medical or cosmetic products, additional investments may be needed at the stage of clinical trials and certification. Technological projects, such as mobile applications, will need money during scaling.
To attract "smart money", a startup needs to:
LLC "EIFOS HUB" recommends
Look for investors and sources of financing. Work on a strategy: the better your plan is thought out, the easier it will be to attract an investor. The ability to explain the value of a project is a skill that directly affects the future of the company. And to avoid getting into an unpleasant situation, prepare for negotiations: understanding the interests of investors, carefully reading the terms of contracts and consulting with experts will help you avoid mistakes and achieve success.
LLC "EIFOS HUB" lawyers and financial analysts will help prepare the project for negotiations, competently formalize the terms of cooperation. They will conduct an audit of business processes.
Almost any startup cannot develop for a long time solely on its own funds. Investors need to understand in advance when and for what they will need to allocate funds. For example, IT products - for scaling, biotech - for clinical trials. If a startup is developing medical or cosmetic products, additional investments may be needed at the stage of clinical trials and certification. Technological projects, such as mobile applications, will need money during scaling.
To attract "smart money", a startup needs to:
- Clearly formulate a value proposition.
- Show knowledge and understanding of the market - from local to global.
- Prove that the project is being handled by professionals.
- Show a real case - with a solved problem and already obtained results.
LLC "EIFOS HUB" recommends
Look for investors and sources of financing. Work on a strategy: the better your plan is thought out, the easier it will be to attract an investor. The ability to explain the value of a project is a skill that directly affects the future of the company. And to avoid getting into an unpleasant situation, prepare for negotiations: understanding the interests of investors, carefully reading the terms of contracts and consulting with experts will help you avoid mistakes and achieve success.
LLC "EIFOS HUB" lawyers and financial analysts will help prepare the project for negotiations, competently formalize the terms of cooperation. They will conduct an audit of business processes.
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