A Guide To Funding

These are the Metrics that Investors are Primarily Interested in:
The general parameters that one must monitor are the sales metrics, customer metrics and financial management metrics to predict the areas of improvement for the start-up.

Customer Loyalty is Verified using Feedback Forms and Surveys
Conversion and customer service feedback are two KPIs that capture the company’s image among its user and public in general. As a startup, the Customer Acquisition Cost (CAC) is a metric that causes concern. It is the money spent in acquiring each new customer and indicates the effectiveness of the sales and marketing acumen of the startup.

CAC = (Total Marketing Cost/Total Customers Acquired)
As a B2C startup, advertising is essential to persuade customers. These costs will matter when the start-up is trying to scale up or even stay afloat after a given time.

These factors generally help the investor understand and analyze the lifetime value of the business and the scale it can grow.

Gross Margins Measure the Operating Profitability.
The gross margin of the industry will be helpful in determining the start-ups’ place in this competitive world. The gross margin determines the effectiveness of the management, sales, and customer teams.

Activation can be defined in several different ways depending on your business. It measures quantities like the number of clicks, time on the website, pages viewed, downloads, email/blog subscription, or even a trial signup. This also gives a measure of how many potential customers are interacting with the product.

Technological Readiness
Before pitching a startup, the product must meet some expectations to generate investors’ interest. It is critical for startups to have in-depth research on the viability of the product. The next task of start-ups to be technologically ready is to track customer on boarding. A beta version is always recommended to evaluate customer reaction and fine tune the product before its official launch.

Business
For a business to succeed, one must understand the market intricacies that the product will be constrained or enabled by. The sectors of operation are crucial to any start-up, and the newest trends will influence the performance of the product in the current environment as well as cause further improvements in its current product or service. The start-ups in T-Hub focus on sustainability, FinTech, social mobility, HealthTech, SmartCity among others.

The prominent business models for B2B are the subscription model and the freemium model. As far as the subscription model goes, B2B can benefit from this as much as B2C startups do, by increasing customer retention. In today’s cut throat commerce landscape, customer loyalty is worth the upfront investment.

The other popular model is the Freemium model, but the requirement for it is a huge market due to low conversion rates - usually ranging from 3-10 percent. The flip side of this is that when you’re trying to build a brand and a user base, the freemium model makes it easier to get exposure, a base of quality leads, the potential of high virality and a built-in sounding board for essential user feedback.

General Metrics
Having an idea is not the only thing required to attract investors. A lot of different things play on the mind of investors before investing in any start-up. Other than these metrics, there are several different ways for a company to get more funds.

There is a greater likelihood that VCs who are more familiar with entrepreneurs are more likely to invest in them. Usually, at the nascent stages of a startup, the business model of the start-up might be overlooked if the team is healthy and there is a belief in the leaders’ passion and execution skills. It is critical for any startup to be able to defend the reason for their existence and why the start-up is essential for a better future. The strength of the business numbers determines whether the emphasis is to be laid on it or not.