What is the most important factor in an investor's decision whether to invest?
I know there are several things to get across in an investor pitch, including problem, solution, size of market and team, but what is the most critical thing to emphasize? Is it the team or the market or something else?
As an investment advisor, I see the most important decision whether to invest or not being whether the person can reasonably keep the money invested. If the person's finances are rocky, there's a good chance they could liquidate the investments. This would impose a likely loss consider the potential costs to liquidate (upfront sales fees, penalties, etc.) and market conditions. This we leave the investor with less money than they invested. Other than that, people work hard for their money. It should work hard for them, too.
Every investor will have their own criteria for investment, their own risk profile and their own target ROI. So there is no straight answer to this. When pitching an idea to an investor, you have to instill confidence in the investor that you can run the company and make it profitable. There also needs to be sound market analysis to back this.
There clearly needs to be a problem that you're solving, your solution needs to be defensible and feasible, the market needs to be growing. However, through my own startup experiences, it's all about the team ultimately.
Investors are going to look to at the "whole package" when deciding if your business idea is worth the risk to invest. It is impossible for investors to make their decision on just one factor, but there are areas of the business you can focus on that are more important than the rest. The Business.com guide, Is Your Startup Ready for an Angel Investor? lists the 6 areas most important to investors.
1. A disruptive innovation
2. Shared risk
3. A business that can scale
4. A realistic business plan
5. Signs of success
6. A strong team of founders
If your business has addressed each area, then it is ready to take on an investor.
If your business is unprepared in one of the six areas, it is important not to rush to fix it. Finding the right investor to approach takes time and so should the preparation.
Carrie critical thing varies per investor.
Just think why you want to invest ?
Critics part is the security of why? For example one is investing to help someone than he will always be looking for the security of his investment amount not the return of a business.
Critical point depends on why you want to invest.
Carrie, I think you'll find the article under the following link extremely helpful: http://recode.net/2014/05/05/why-wont-anyone-give-me-money/.
Honestly I would say make sure you trust and feel comfortable with the person you are investing with. Do they answer your questions AND also explain them so you can understand. Do they make you feel like part of the process or are they just there to sign the app and get a check. Second deal with a local broker NOT some one captive to just one company with a biased opinion of everyone else. Go see a couple brokers and ask them where they keep their money.... THAT will certainly answer your questions :)
Apparently everyone else thinks that there's a ton of different "most important' factors when deciding to invest, but in my experience, it all comes down to profitability. If you're able to turn a profit, then the investor will turn a profit, which is the idea of investing. Nothing else matters when an investor is losing (or earning) money on the investment.
Everything else everyone has mentioned is just a factor in the overall analysis of the Risk of loss an investor is taking. If the risk of loss is too big, they won't invest. If the risk is low, and therefore probability of profitability high, then they will invest. The rest, like size, age, experience, are just an individual investors taste.
Sometimes its timing (you cant control), you may get rejected today just because there is another concept competing for the money and time of the decision makers. But I like Jaci's answer the best.