Why Investors Will Certainly Reject You

What criteria are typically used to evaluate founders like yourself?

Today, I want to fully unveil or at least partially lift the veil on the world of project selection for future funding. I aim to illustrate for startup founders what an investor perceives and contemplates when a founder approaches them, seeking, let's say, a million dollars for business development.

So, let's delve into the sieve through which personal traits and professional qualities of startup founders are sifted. Or, in which cases you will undoubtedly face rejection in fundraising:

1.  If your plans as a business owner are detached from reality. 

Investors are keen on value, whether your product or service is in demand, and whether they address real people's problems.

2.  Lack of leadership skills. 

The principal visionary of the startup is the driving force behind the entire process. If they lack leadership qualities, skills, and the experience needed to steer the project to a logical conclusion, this won't escape the investor's scrutiny.

3.  Inability to prioritize. 

If project participants evade setting priorities or mismanage them, it jeopardizes the success of the entire endeavor. A project should have a roadmap for its development – one that is logical, cost-effective, and outlines the critical path for the startup's growth. Even an outstanding product may not find its audience without a solid go-to-market strategy.

4.  Concealing the project's challenges. 

Startup leaders cannot keep silent about the problems and difficulties their team encounters, especially with themselves. This undermines trust in you as an entrepreneur and partner and hampers the business's development.

5.  Lack of self-motivation and belief in your own venture.

If project participants lose interest in completing it, it sends a clear signal to investors that your drive may not be sufficient to steer the business for 3–5 years until it becomes profitable.

Next time, I'll elaborate on the specific characteristics that investors primarily focus on when evaluating a startup.