In our efforts at 249Startups to connect high potential growth startups with local and international investors and strengthening the investment ecosystem and culture in sudan , We have launched series of articles where we will be summarizing important concepts around ideas evaluation , MVP development and investments to better help entrepreneurs prepare more to meeting investors .
And, with the 2nd 249Startups Investment Demo Day approaching, we are preparing for showcasing this year portfolio of startups to angle investors , accredited investors and corporate to link high growth startups with funding .
What do investors look for in a pitch ?
Be specific about your capital needs and how will you spend it and grow your value. | Amro Zakaria ,Founding partner -Market Trader Academy
There are three main types of investments for startups:
- Done through retained profits and personal savings.
- Doesn’t diversify risk for startup founders.
- Financiers do not share risk.
- Investors do not share equity.
- Obligation to payback (loan).
- Give Up part of the startup share to investors who will share risk.
- No obligation to payback.
Types of equity capital funding:
1. Seed / angel investor:
- Early stage of the startup.
- Usually done by individuals.
- Takes a lot of risk but if successful has a very high return (50x, 100x).
2. Venture capital (VC):
- Done by venture capital firms.
- Takes less risk than the angle.
- Comes in the scaling stage.
3. Private equity:
- Later stages (before exit).
- Larger investment.
What to present in a pitch to an investor:
- Business metrics.
- The Financial statements.
- The people.
- Monthly unique customers/ visitors.
- Customer conversion rate (visitors to clients ).
- Bounce rate (leaving visitors/ customers).
- Average order value.
- Monthly active users.
- Average revenue per user(ARPU).
- Monthly recurring revenue(MRR).
- Revenue run rate (measure revenue growth).
- Contribution margin (profit) per order customer.
- Customer acquisition costs (CAC).
- Contribution margin after marketing (CMAM) (to know how current marketing added value ).
- Crunch rate (measures ability to retain customers).
- Burn rate (rate at which company is spending capital).
- Live time value (LTV) (revenue the customer will generate).
- LTV/CAC ratio(indicates customer profitability).
- payback(number of orders/ visits to return CAC).
- Viral coefficient (indicates viral growth potential).
2.Types of financial statements:
- Income statement (revenues and costs).
- Balance sheet (assets and liabilities).
- Statement of cash flow (where does cash come from and where it goes).
- Investors care alot about founders capabilities, mindset and potential.
with over 17 years of experience in the brokerage industry and global markets in new york city before cofounding Market Trader academy USA. Amro has worked as the regional director for two of the largest publicly traded US-based firms in the foreign exchange and derivatives industry.
He is a frequent guest speaker on many of major business TV station, which includes skynewsarabia , CNBCar, DubaiTV and Al-Arabiya. He is also a frequent contributor to many print media as Private Investor and most recently Newsweek ME magazine. He writes mostly on global market trends and how they intersect with the banking industry. Furthermore, he is a guest lecturer at many regional universities such as SP Jain of Singapore and American University in Emirate and lectures on topics related to the global markets.
About 249Startups Demo Day
Our 2020 Demo Day is the culmination of all the hard work for our latest startups. We’re proud of the great strides made to improve their product-market fit and increase their customer traction. 249Startups supported them by hundreds of rigorous training and coaching sessions on topics ranging from growth hacking to financial modelling, supplemented with weekly mentorship sessions.
Join our 2nd Demo Day
During This year Demo Day, the startups will present the results of their work and investors will be able to discuss further cooperation with them. This year we will go digital due to COVID19 . Accredited investors will be invited to engage directly with the founders, invitations will be emailed to vetted guests.If you are interested in invest in 2020 portfolio startups feel free to contact us at firstname.lastname@example.org . Demo Days are invited only events exclusive to Angel Investors network , partners & accredited investors .
This Article had been developed by 249Startups Team for purpose of learning and sharing knowledge as part of Investments & Funding .