What factors do investors focus on before deciding to invest?

Is a startup's revenue model something investors care about?
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And the Investor ANSWERS:

Listen to investors: Which startup factors matter most to them?

Although Vietnam's startup scene has yet to show any real improvement, we can see that substantial foreign venture capital continues flowing into the country. Perhaps the largest venture capital fund in Vietnam today is IDG Ventures, whose portfolio has reached 43 companies, including prominent names such as VCCorp, Vatgia, and Peacesoft… Another name that certainly cannot be overlooked in venture capital is CyberAgent Ventures, with a Vietnamese portfolio of 12 companies, including VNG, Tiki.vn, and CleverAds. Nguyễn Mạnh Dũng – Director of CyberAgent Ventures in Vietnam and Thailand. We spoke with Nguyễn Mạnh Dũng, Director of CyberAgent Ventures in Vietnam and Thailand, about the factors venture capitalists examine most closely before deciding to invest in Vietnamese technology startups. Dũng is widely known in the community as Dzung Nguyen. What factors do investors focus on before deciding to invest? The startup team. In answering this question, Dũng said that when looking for technology startups to invest in in Vietnam, the first place to begin is the startup's team. Startups need not only immediate, short-term goals but also a long-term strategic outlook. They must look beyond their current situation and be passionate about building their careers. Their starting point should not be money alone, but delivering greater benefits to users or supporting the development of something. A startup team should begin with people who share that vision. But passion alone is not enough; startups need to understand themselves clearly. They must clarify what they need from investors, what they will do with the money they receive, and how they will generate returns. Dũng said: When starting your career, the first thing you need to do is identify your strengths. If you cannot identify them yourself, how can investors understand them? As investors, we need to know your strengths and weaknesses to find the best way to support you. A good team must know where it stands and what it should do next. If it has not figured this out, perhaps it first needs to find a mentor. But one prerequisite before approaching investors is knowing what it needs. Clear objectives. However, a good team cannot solve everything: even a good team cannot salvage a bad idea or product. No investor is foolish enough to waste money, relationships, and resources supporting a product with no clear purpose. The biggest negative when startups meet investors is not even knowing what problem their product solves. They need to answer: “What user problem will our product solve?” Without a clear purpose for your product, how can you attract users? What I hope to hear from startups is: “We know users face this problem and urgently need the solution we offer. By optimizing our technological skills, we will provide a solution to that problem.” Market size and potential. Market size is another major consideration. Dũng emphasized: Even if your startup has a strong team, if it targets too small a market, the results will still be insignificant. Even if you capture the entire market, your business cannot grow any larger. We therefore care about market size and how you can make your startup grow and become profitable. Do investors care about a startup's monetization model? Many startups today “naively” focus solely on attracting as many users as possible rather than finding a monetization model. But remember: without a clear monetization model, you will not attract investors. Dũng emphasized that money may not be the most important issue for a startup in its first 3 years if it receives investment. However, it needs to proactively find ways to survive without investors' money. Suppose a startup believes its product or service can truly benefit users but needs time. How much time is enough? More importantly, where will the money come from to survive until it bears fruit? A startup may live on investment for its first 3 years, but without finding its own monetization model, what will it do from year 4 onward? How can it continue without investors? If it cannot figure this out, it will die. Dũng also offered a comparison: in the United States, a large user base gives you a very good chance of receiving investment. However, Southeast Asia is entirely different. Series A investments are fairly common there, and the reality is that the more money you spend, the faster you gain a large user base. But what happens afterward? Therefore, in Southeast Asia, especially Vietnam, investors look beyond user numbers to how the startup will make money and the purpose served by its product or service.

Source: (Edited by Sơn Trần)

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