Startups seeking investment need to prove their business model and traction.

247 - Securing investment goes far beyond having an innovative idea. Startups seeking funding need to present a structured business model, well-defined financial metrics, and a clear growth plan to attract increasingly selective investors. A study by CB Insights shows that 35% of startups fail because they are unable to raise investment, often due to a lack of clarity about their operations and market.

According to Marilucia Silva Pertile, co-founder of Start Growth and startup mentor, preparing to raise investment begins long before the first meeting with investors. “Venture Capital funds want startups that know where they want to go and how they will use the resources. A well-crafted pitch only works when there is a solid plan behind it,” she states.

But what makes a startup truly attractive to investors?

What investors look for in a startup

To secure funding, startups need to demonstrate traction and scalability potential. Marilucia highlights some essential factors for attracting investors:

• Market and clear problemIt is crucial to demonstrate that the startup solves a real and relevant problem more efficiently than the competition.
• Sustainable business modelInvestors want startups capable of generating predictable revenue and growing without relying exclusively on new investments.
• Financial and operational metricsCustomer Acquisition Cost (CAC), Lifetime Value (LTV), Monthly Recurring Revenue (MRR), and churn rate are key indicators for measuring performance.
• A prepared and committed team.In addition to the product, the founding team and its ability to execute are decisive factors in choosing an investment.

The importance of a well-structured pitch.

The pitch is the first major test for a startup. A poorly planned presentation can jeopardize even promising businesses. "A poorly structured pitch can scare away investors, even if the idea has potential," warns Marilucia.

To increase the chances of success, an effective pitch should contain:

• Value offerWhat the startup does and what problem it solves.
• Market sizeWhat is the potential for growth and revenue?
• Business modelHow the company generates money.
• Competitive edge: which makes it unique in the market.
• Metrics and traction: results already achieved and future projections.
• TeamWho are the founders and what is their experience?
• Use of investmentHow will resources be used to accelerate growth?

Financial planning: a decisive advantage

Poor financial organization is one of the main reasons why startups lose investments. According to CB Insights, 38% of startups close their operations due to cash flow management problems.

To prepare for an investment round, it is essential to:

• Have realistic projections of income and expenses.
• Control the burn rate (cash consumption rate).
• Demonstrate how the investment will be converted into growth.
• Maintain organized documentation for due diligence (financial and legal audits conducted by investors before investing).

Networking and strategic relationship building

In addition to good internal planning, building strategic connections is essential for startups seeking investment. Participating in accelerator programs, industry events, and mentorship programs helps expand your network and attract investor interest. “Raising investment begins long before meeting with a fund. Building relationships with investors and being present in the ecosystem increases the chances of securing funding at the right time,” emphasizes Marilucia.