How to Close Your Next Funding Round – What Do Investors Typically Look For?

Raising funding is a pivotal moment for tech businesses, particularly those with fewer than 500 employees navigating Series A, B, or C rounds. Investors are often drawn to companies with a clear plan for scaling, demonstrating market traction and aligning leadership talent with long-term goals.

We’ve compiled the key factors investors assess when seeking to spend and how recently funded companies have strategically positioned themselves for success. 

1. A Clear Vision for Growth

Funding Stage:Investors seek evidence of product-market fit and a scalable business model. For instance, one Series B company we worked with had just raised $75M. They impressed investors with their plan to shift from generalist-built platforms to solutions developed by specialists, a clear signal of their commitment to scaling sustainably. 

2. The Right Talent in Place 

Scaling often requires leadership with domain-specific expertise. This same company realised that to dominate the payments sector, they needed to hire senior leaders with industry knowledge, recruiting talent from competitors. Investors value teams capable of executing ambitious growth plans, which includes upgrading leadership where necessary. 

3. Market Traction and Metrics

Metrics like annual recurring revenue (ARR), customer acquisition cost (CAC), and lifetime value (LTV) are crucial. Investors want to see steady growth backed by robust operational efficiencies. Demonstrating control over these metrics shows the business can maximise the impact of their funding. 

4. A Strategic Use of Funds 

Investors are keen to know how the funds will be allocated. Are they earmarked for R&D, expanding go-to-market teams, or international scaling? Companies with clear, compelling plans for using their capital effectively are far more likely to secure funding. 

5. Resilience and Adaptability

Funding Particularly in a dynamic tech landscape, investors look for companies that have weathered challenges and adapted. Showcasing how your team has navigated market fluctuations or pivoted effectively can instill confidence in potential investors. 

Closing Thoughts 

Whether you’re preparing for your first institutional round or a follow-up investment, it’s crucial to align your business strategy, leadership team, and market approach with investor expectations. Demonstrating your ability to scale effectively, backed by a strong leadership team, positions your company as a worthy investment. 

If you’re planning to raise your next round, Montash can help you attract the domain-specific talent that investors expect for a scaling business. Our expertise ensures that your leadership team is primed for the challenges of growth, allowing you to stand out to investors. 

Words by Shay Patel, Head of Commercial, US Division.

To get in touch for US-based work opportunities or hiring support, you can connect with Shay here.