8 Ways Investors Value Startups

Even though we write and talk about how to pitch to investors, there is less content about how investors assess and value startups. There is a lot of overlap between what goes in a pitch deck (Problem, Solution, Advantages, Market, Competition, Business Model, Go-to-Market, Traction, Team, Ask, Financials), but check out the nuances in the list below to see how your startup is likely being viewed by others, and what else you can add to your story to improve investors’ perception of value in your startup:

1. Value Proposition

   1. How real is the problem (will people come clamoring for your solution)?

   2. How scalable is the solution (can you execute and make money)?

2. Market

   1. How big is the market?

   2. What can you realistically capture (and by when)

   3. Is there room for you to grow?

3. Competition/Defensibility

   1. Who else is in the space?

   2. How are you different?

   3. How will avoid a price war to the bottom?

4. Traction/Validation

   1. What have you done lately (customer discovery, MVP, sales activation)?

   2. What has been the response (feedback, leads, LOI/MOU, Sales)?

5. Team

   1. What demonstrated skills do you bring to the table?

   2. What transferable skills do you bring to the table?

   3. How deep is your bench?

   4. Who’s backing you (advisors)?

   5. Are you motivated and confident?

6. Financials

   1. Do you have a model?

   2. Is there an underlying logic to how the financial model was built?

   3. Are the assumptions backed by data?

   4. Do the unit economics work (LTV, CAC, Payback)?

   5. Is the growth trajectory clear?

7. The Deal

   1. Are the terms attractive and fair?

   2. Have you justified your valuation?

   3. Does your strategy (go-to-market, staffing, development, etc.) jibe with your ask and vice versa?

8. Exit Potential

   1. Do you have the ability to create an outsized return on invested capital (a high exit multiple)?

These aren’t all slides per se, but the messaging in these eight points should most definitely be part of every startup pitch narrative.