In the fast-evolving world of manufacturing technology, securing investment can be a game-changer for startups and innovators. Venture capitalists (VCs), corporate investors, and angel networks look for specific criteria when evaluating emerging technologies. Understanding these factors can significantly enhance a company’s chances of securing funding and accelerating growth.

In the article below, we’ll analyse the different criteria you might not forget to attract investors and create successful partnerships!

Top 6 factors that attract investors

1. Market potential & scalability

Technology scalability refers to a system’s ability to handle increasing workloads, users, or data without compromising performance, efficiency, or cost-effectiveness. This refers to the capacity of your technology to adapt to new processes and circumstances. 

Investors seek technologies that address large market needs and demonstrate scalability. They usually evaluate factors such as market size and growth trends, industry adoption rate and pain points solved or revenue potential and business model scalability.

2. Competitive advantage & differentiation

The value proposition of your technology is the clear, compelling reason why customers choose it, highlighting the unique benefits it delivers in solving their challenges effectively. 

Defining that statement is key to ensuring you have a good understanding of what you are offering and a key tool to pitch your idea in front of investors. 

Also, defining and designing critical questions such as proprietary technology, barriers to entry from competitors and how to solve them or a clear differentiation from existing solutions will help you to improve your sales speech and attract VCs to your company. 

3. Technology readiness & proof of concept

Emerging technologies should be validated through real-world applications. It’s imperative that understanding what first users think about what you are developing can help you to redefine your solution and make improvements in the late stages of development. 

Understanding the Technology Readiness Level (TRL) status of the solution you are creating will help you to draft clearly the next steps you need to take to successfully bring it to market. 

Along the same line, successful pilot tests or test-before-invest programs are an excellent way to promote your technology and get real insights from the market. Those programmes will help you to develop early adopter testimonials and case studies that will allow you to understand and have a

At Techfinders, we help cutting-edge technologies take their final step to market by connecting them with the right early adopters. We facilitate impactful collaborations that lead to real-world use cases, providing developers with valuable market insights to refine their solutions. At the same time, SMEs gain a clear understanding of how these innovations can enhance their processes. If you want to know more about what we do, check our services page. We’re here to help you! 

4. Business model & revenue strategy

A well-defined business model increases investor confidence by demonstrating a clear path to profitability and sustainable growth. Key aspects include effective monetization strategies, such as licensing, Software-as-a-Service (SaaS), or direct sales, which outline how the business generates revenue. Additionally, understanding customer acquisition costs (CAC) and customer lifetime value (LTV) helps investors assess long-term viability and return on investment. Lastly, a solid plan for revenue diversification reduces risk and enhances stability, ensuring the business can adapt to market changes and maintain steady financial performance.

GLOSSARY OF TERMS

5. Team & execution capability

Investors back strong teams with the potential to execute their vision successfully, evaluating key factors that indicate long-term success. They assess the founders’ expertise and industry experience, ensuring they have the knowledge and leadership to drive the business forward. The strength of both the technical and commercial teams is also crucial, as a well-balanced team can effectively develop, market, and scale the product. Additionally, investors look for a team’s ability to adapt and pivot based on market feedback, recognizing that flexibility and responsiveness are essential for navigating challenges and seizing new opportunities.

6. Regulatory compliance & industry standards

Navigating compliance efficiently can be a competitive advantage, giving businesses a smoother path to market and reducing potential risks. Investors look for certifications and regulatory approvals, such as ISO standards or CE marking, which demonstrate credibility and adherence to industry standards. Compliance with safety and environmental regulations is also crucial, ensuring the company meets legal requirements and avoids costly setbacks. Additionally, strategic partnerships can facilitate easier market entry by leveraging established networks and expertise, further strengthening the business’s position in highly regulated industries.

For emerging manufacturing technologies, aligning with investor expectations can improve fundraising success. By focusing on market scalability, differentiation, technology validation, and financial planning, startups can build a compelling case for investment.

ABOUT THE AUTHOR

María Páez Guerrero

Techfinders Product Owner and Product Marketing Manager

María drives product strategy and marketing at Techfinders, helping manufacturing developers craft compelling value propositions for their solutions and connect with a strong online community. Her work ensures that SMEs can seamlessly access and adopt innovative technologies.