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Inside the Investor’s Mind (Infographic)

Without a doubt, Funders and Founders is one of the best places to find startup infographics. Anna Vital has some beautiful graphics that are both inspirational and/or educational.

This one caught my eye as I was perusing the site last night. The inner workings of an investor’s mind are often a mystery to first time founders. What exactly do you need to prove to get investment? What is the investor judging you on, as you nervously ask him or her for hundreds of thousands of dollars.

The answer, as this infographic shows, is, “A lot.” There are a million things that go into an investor’s decision to put money into your company. Some things you can control, like the size of your team and the quality of your product. Some things you have no real ability to forecast yet. How many rounds will you need to build your company, and how much will that dilute the original investor’s return?

However, many times the things that are complicated are also simple. What is an investor looking for when he or she is introduced to your company? SoftTech VC Managing Parnter Jeff Clavier summed it up in the “3 Asses Rule”: smart ass team, kick ass product, and big ass market.

Of course, you really can’t know everything an investor is thinking. Even the graphic below is only the thought process of one particular VC. Still, it’s a safe bet that if you’re following the “3 Asses Rule,” it won’t be too hard to raise some capital.

*Infographic from Funders and Founders.

  • http://Allberta.com/ Allberta.com

    I good summary. But the exit is much more complex. 5X to 50X in 3 to 5 years is key.