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Serial Entrepreneur and Go BIG
Founder Wil Schroter's Blog!
What Investors (Really) Want: BIG Growth
Author: Wil Schroter
Monday, January 29, 2007

There you are, showing off your incredible presentation to an investor -

"Look, for only a $500,000 investment we can grow to over $3 million per year in revenue in only four years!"

<investor begins to nod off... entrepreneur presses on>

"And we can achieve profitability with a 30% margin, generating nearly a million dollars in profit every year!"

<investor's head is pointing at the ceiling - he has fallen asleep... entrepreneur presses on>

"This is an incredible deal!  So if you could just make your investment... hello?"

<investor actually begins to snore... this is the best sleep he's gotten in weeks>

What happened?

If you're wondering why your "can't miss, big-time" deal is putting investors to sleep, it's not because you're turning the lights off before your presentation.  It's because you don't know what an investor really wants.

Investors want BIG growth opportunities, not just nice growth opportunities.  They want a company that is growing so fast that another company wants to buy it quickly.  They aren't interested in taking a percentage of your profits four years from now.

So what is "BIG" growth?

BIG growth puts you on the Inc 500 (though preferably at the top, not the bottom).  Or said differently - BIG growth means that someone will want to buy your company in a very short period of time. 

The only way for professional investors to get a large return in a short period of time is either to sell the company or to take it public.  So you need to demonstrate you can do that.

Even the companies at the bottom of the Inc 500 are seeing 300% growth year over year (that's the minimum requirement).  But it gives you an indication of how faster-growing companies are moving.

Does every investor need to see BIG growth?

No.  Some investors, particularly Angel Investors and some wealthy individuals, are actually looking for deals that will throw of some profit and generate some residual income. 

But if you're talking to venture capitalists or larger investors (basically people who invest other people's money for a living) then yes, they are going to need to see BIG growth in order to write a check. 

How do I know what an investor wants?

Ask them.  In fact, you shouldn't even be in the room with an investor unless you know exactly why the type of deals they have funded in the past are aligned with your investment opportunity.

If you're going to get investors to write checks, you need to know what types of deals keep their attention.




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