Startups are all the rave now, and when you think about a startup, certain things come to mind; funding, angel investors, big breaks, and the million dollar idea. Because startups are the new gateway to heaven, a lot of people have misappropriated the concept and have ended up with a million replica and versions of the same idea.  When you consider startup businesses, there are equal chances of success and failure, and this is based on a lot of factors, founders, idea, team, target market, profitability, and dependence on investments, amongst many others.

From an investor’s point of view, it is also a risk putting your money in a startup company, an idea, a product, whose sustainability is still unproven.

This is why we thought to guide you with some of our tested and proven truths on double checking before investing in a startup;


Before you invest in a startup, you need to be aware, as  an Investor, who are the people working on this business idea, one person, two or five, what is the level of proficiency of their distinct role? How do they directly affect the product, dig into their past record, if it is a service, is there a “get up and go” team, the ones that provide this service to customers? Every individual must play a key part in developing this idea.


Startup companies today, have different definitions of success, some consider success as lots of views, sales, or whatever metrics they consider, in the first year, some consider it as hitting the million or billion mark, some others consider it as their product working without any glitch, as an investor, you need to be sure that beyond getting your investment back with profit and other benefits, the value the startup business attaches to success is something you approve of.


Before investing in a startup, you need to consider how the product makes you feel, you are the first client, customer and you need to be sold on the idea of the product before you expect someone else to? Is the product offering amazing perks at the click of a button, is it a one-stop shop for all your tech – inclined problems or is it just a slight enhancement from an existing idea, in which case, you might need to ascertain its integrity.


This is probably the determining factor for any investor, please note, before you invest in a startup, yes, everyone has a business idea and everyone has a “market” for their idea, but how big is the market for this start-up, what is the margin for scalability in four or five years down the line, if it is an already existing idea, the market is definitely stiff, as already existing competitors have juicy perks to attract their customers, so what is the new business offering that others aren’t, and if it is a new idea, what is their strategy for breaking into the market and what is the strategy to drive growth?

That said, there are a lot more questions investors and start-ups alike need to ask before getting a final handshake or signing over that deal.

Open chat