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Characteristics that demonstrate potential in a start-up company

Start-up companies are all the rage and with each new innovation, a wave of excitement intrigues money-hungry investors in Minnesota. So, the question is, what are these investors interested in? Are there certain qualities that demonstrate potential? Investors often go to great lengths to understand a company's vision and future before agreeing to any sort of funding. When start-up companies are aware of the characteristics that are sought by financial partners, they may be able to more effectively market themselves as a promising opportunity. 

Perhaps the most important feature that investors look at is the intellectual property of a start-up. What kind of product are they providing? How does it help meet a need not previously met? Does it provide convenience, or expedite a necessary process? If it is a service or technology that is offered, the same type of criteria will be assessed in determining the company's level of competition in their given industry. 

Investors will also pay attention to the type of people within the organization. Often, they look for individuals who demonstrate tenacity and a willingness to take risks. When they ask questions about the enterprise, they are looking for confidence and enthusiasm in sharing information about the product or service being offered to consumers. That being said, they will also analyze market conditions and decide if the investment is worth their time or money or if the industry is too crowded to make a difference. 

If a start-up company is looking to boost their image and secure a promising future, they may wish to enlist the help of an attorney. A legal professional can provide knowledgeable insight and educate business owners on their options for protecting intellectual property. 

Source: Investopedia, "What are the typical criteria for choosing to invest in a company, given the assumption that an investor believes in the venture," Sahil Vakil, May 26, 2018


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