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Optimization of Business Ideas to Attract Investors
2 points by zbrown 1725 days ago | hide | past | web | 1 comment | favorite
Anyone have any sugeestions on how to optimize a business idea to attract investors? Other than an opportunity to make money (which we all can understand), what do they look for? How do they decide what they are interested in, and what they are not?

They really are trying to make money. Read Entrepreneurial Finance by Leach / Melicher. They list a few things:

Market Size potential > $100 million

Venture growth rate > 30%

Market share > 20%

Legally protectable IP

Gross margins > 50%

After-tax margins >20%

Break even within two years

IPO within two years

There are non-financial factors such as the type of business. Most people will not want to invest in something that seems unethical or has legal risks.

Also there's the novelty of the idea, who else is investing, etc. Maybe some investors can chime in.

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