Have you assessed the real value of your business yet?

Early stage venture capital investing in India is emerging as the flavor of the season propelled by the country’s burgeoning economy, so essentially it becomes very important for one to valuate one’s business before approaching an investor.

Here are some simple pointers that would help you know what the investors actually look at before funding your enterprise:

Commercial aspects: The commercial aspects of the venture including its core markets, target audience, market reach and the scalability options.

Skill set: The skill of a start up’s management team – A strong team with relevant industry experience, contacts and track record which will attract a premium valuation.

Analyzing finances: Estimating the potential cash flows, capital required during its life cycle and the return on the capital invested.

Totality: The total value of cash, assets and intangibles already invested by the entrepreneur into the venture.

Investors generally believe that aspiring entrepreneurs should be better prepared to hard sell their ideas and company to gain a fair valuation. Not to forget an investor would also take into point the return on investment which is very crucial.

It becomes the responsibility of the entrepreneur to convince the investor the potentiality of the business and how it can become big given a time frame of 4- 5 years.

Source : ET