What are investors, and what role do they play for start-ups?

Investors are individuals, companies or organisations that invest capital in a business in order to support its growth and, in return, to achieve a financial return. They provide financial resources to start-ups and established companies, thereby making a significant contribution to the funding of innovation, market entry and scaling strategies.

For start-ups, investors are often a key source of growth capital, particularly when their own financial resources are insufficient to fund product development, sales or expansion.

As well as capital, investors often bring other added value:

  • strategic expertise
  • Industry experience
  • Access to networks and contacts
  • Support for business development and growth
  • Support with further rounds of funding

The main investor groups include:

  • Business Angels
  • Venture capital firms (VCs)
  • Family Offices
  • Corporate Venture Capital (CVC)
  • Private equity investors
  • public funding bodies

Investors’ objectives are generally as follows:

  • to share in the company’s growth
  • to increase the value of their shareholding
  • to achieve long-term returns
  • to achieve a successful exit

For start-ups, working with investors offers numerous advantages:

  • Access to growth capital
  • faster scaling of the business model
  • greater credibility in the market
  • strategic support with key decisions
  • Access to potential customers and partners

At the same time, bringing in external investors often means ceding a stake in the company and granting them certain rights to have a say. That is why selecting the right investors is an important strategic step for founders.

A successful investor relationship is based on shared goals, transparency and mutual trust.

innoWerft helps start-up founders to develop their funding strategy, approach suitable investors and prepare compelling business presentations for successful funding rounds.