4 Top Reasons investors wouldn't invest in your business

[Augusta]

The truth is that some businesses might not get the investors to fund their business. It is not about the financial institutions hating you or your business but they haven't seen any financial reason why they would invest in your business. The below top points might just be the reasons behind their decline for your business

1.Lack of leadership skills: The investors know that for a business to succeed as it should the leadership must be exceptional. The fact is that the person at the helm of affairs is the coordinating factor in a business, when these skills are not exhibited then the business might not survive.

2. Improper cash flow: This is like the most important, they will look at the cash flow of the business. They will look at the inflow and outflow of funds to know if the business will worth them investing their money. With little or no inflow of cash they might not want to invest.

3. Having inexperienced teams: Working with Amateur team mates might hinder investors from investing. No one would want to dump their hard earned money in the hands of Amateurs. Investors will see this as a fall.

4. Following the bandwagon: Investors will jump at a unique business idea not the regular ones.

Add your thoughts

 

[btaliat]

Investors are always want to make money too. That's why they don't invest blindly with people. They first check the company and do some kind of researches before they can invest their money in another person company. The following may be some factors that they will look into before they decide to invest their money.

An intending investor will surely check the past performances of the company he wants to invest in. He will like to know whether the company has a good review from the people that have partnered with them in the past. If there is good review, this may prompt to invest even more money in the business.

Not only that, the management style will be checked. How often does the company change its management and why? He will want to know the workers that are working there. Are they in good terms with the management. He will want to know whether those workers are hardworking and result oriented.


The return on the investment cannot be overemphasized. Everybody wants to make money. So it is incumbent on the intending investors to check the return on the investment before investing. The more the returns, the more the money to invest.

 

[Prayzident]

When you talk about investors investing in your business,the number 1 thing that the person has to consider is how orderly his business is and how his team members organises the things of the business. Another thing how your business grows on daily basis for instance,in an organization where shares are sold for an investor to invest and buy shares in your organization there must steady growth on your business in the organisation.

 

[Ithedicious]

Thanks for the update. That means for us to make our business more approachable by investors , we have to first of all make our business stand out in terms of its management. Nice one I didn't understand this actually.

But in most cases , if your business is being established in Nigeria, a lot of people may be so sceptical about investing or in some African countries because of high rate of criminal activities.

There are so many people that have lost their money trying to invest in business especially business that do not deal with the government because these type of business may be risky since they can easily fold up at any time Without any notice from the advisers.

Thanks for sharing , I agree with your post and I also believe that making all arrangement to make sure that your business runs smoothly with proper Management and good future potential the possibility of having investors will be a bit higher than when all these things are not in place..

Most people that are interested to have investors In Their Business will always know where to get these investors. In most cases the investors may be someone they know .

 

[Mika]

Do you want to invest in something that does not look profitable? I bet you know the answer. No one wants to invest in a business that does not guarantee success, therefore, in order to attract investors for your business you need to prove that your business can be profitable in the future. What determines the success of a business? There are a lot of factors involved, for example, your team, business strategies, marketing budget, product or services, market size, bad debt, outstanding loan, current revenue, paid-up capital, etc. In order to attract investors to your business, your business also needs to be a legal entity, your business has to be registered with the local administration, and your business needs to maintain the accounts (a balance sheet, audit report, etc.) your business also need tax clearance report. When people invest in your business, they are not actually gambling and depending on sheer luck to profit, they are actually investing in a business that will give them a return on their investment, therefore, your business needs to be fully functional before you can invite people to invest in it. You need to have a cash flow, you need a presence in the market, etc.

 

[Jasz]

The reason is simple: They don't think you can do it. You need to convince them that you have a good chance of succeeding. Here are the top reasons why investors won't invest in your business:

You don't know your market well enough. You don't have a plan for how you're going to make money from your idea. You don't have enough financial information about your company or its costs. You haven't built up enough credibility in your industry, or you haven't been in it long enough. The idea isn't unique enough; there are too many other companies doing similar things already, or they've already been done and failed. Your product isn't finished yet, it's just an idea on paper (or PowerPoint). It doesn't solve any problems that anyone has right now; it's just theoretical, or it's "pie in the sky" stuff that may work someday but not now. Your product is overpriced for what it does; people aren't willing to pay that much for it when there are cheaper alternatives available now or coming out soon that do basically the same thing (even if they're not quite as good). You're trying to sell something at retail (like a product) instead of selling services.

 

[Augusta]

Definitely, banks wouldn't just throw their customers deposit because bank loans are deposits especially the fixed deposit kept by customers in their care. So the bank will want to make brisk money before the maturity of the deposited money and they will give out as loans to others that can pay back at when due with some interest so that they can pay back the deposited money to the customer with interest

So an action like this will need them to be very careful of who they will be lending the money to. This is why they don't want startups that will be doing trial and error with their money. You need to do the business first, established your self and be stable then after a while you can apply for a loan or else you might not be getting any positive response from them.

Like you rightly stated when one doesn't know how a market they are into works it becomes a huge problem to obtain a loan. You need to convince the officials that you are equal to the task and you can handle their money with care and be able to pay back when due or else nothing positive will come out of it.