Why people do not invest in technology oriented startups

Here is the first thing that comes to mind when we hear technology entrepreneurs discussing why they have not raised any funding: They are clueless. It's not because they are technophiles, but because they do not understand the nature of technology investment.

This is a huge challenge because investors are not interested in talking about technology to begin with. They like to invest in growth-oriented companies.  Their interest is only to learn about and from the company and protect their investments.

In many cases, founders ignore the importance of investor presentation, where they should have the chance to showcase their technology and strategies. Most importantly, founders should come prepared with a clear plan, realistic targets, and measurable goals. And investors should invest in a team, which they believe can execute in a short period of time.

The second problem is the way that most technology companies present themselves when seeking investment. While many entrepreneurs want to sound smart and use jargon, there is a line that cannot be crossed. Startups often end up promoting their technology, not their business model. This could turn off investors, who don't want to invest in a technology company.

The best way to avoid these pitfalls is to hire a seasoned professional to head investor relations. This person will help the founders create a coherent message that communicates their strategy and provides clarity. A good investor relations professional can help the company deliver on its strategic goals and communicate them clearly to investors.

The right investors will want to know what the purpose of the business is and what growth targets the founders have in mind. They want to see proof that the company is making progress, not a plan with generalities that offers no clarity on future prospects.

Of course, founders should also have an interesting business idea, and that will make them attractive to investors. But they also need to make sure that their product or service is suited to the needs of investors. The problem, however, is that many entrepreneurs fail to carefully consider investor interests and proceed to launch their technology solution without any consideration for their intended customer.

To attract investors, it's vital for a company to have a business plan that includes its current and projected financial results, growth projections, and competitive positioning. The plan should be attractive to potential investors. This can be achieved by building a credible track record, ensuring its longevity, and having the right products and services that meet the expectations of its target customers.

Perhaps the best way to attract investors is to do everything in your power to make sure you have a profitable business. You may have a great product, but if the target market is not interested, you are unlikely to be able to build a profitable business and raise the money necessary to scale. In the case of hardware startups, it's often crucial to partner with companies that can also help with distribution and logistics. The same goes for software startups that may need help launching their product.

Founders need to be very strategic when looking for investment and that means taking advantage of the investor relations services that are available to them. As with most things, it takes a lot of preparation to make a startup attractive to investors. This preparation can make all the difference in helping entrepreneurs find the right investors who share their vision and can help them turn that vision into a reality.