Ask most founders what investors want to see and they'll describe a polished pitch deck, a slick five-year forecast, and a confident answer to every question. Some of that helps. Almost none of it is actually what decides whether money changes hands. Investors — whether that's a formal angel, a small fund, or a wealthy individual backing a friend's business — are pattern-matching on a much narrower set of things, and most of it isn't in the slides.
Evidence beats projections, every time
A five-year revenue forecast built on assumptions is, at best, an educated guess dressed up as a spreadsheet — and experienced investors know it. What actually moves them is evidence that the business already works in miniature: real customers paying real money, even if it's a small number of them; a repeat purchase or renewal; a channel that's proven it can bring in customers at a cost that makes sense. A modest business with genuine traction beats an ambitious one with none, almost every time.
The founder matters more than the plan
Investors are ultimately betting on the person running the thing as much as the idea itself, because the plan will change and the founder won't — not fundamentally, anyway. What they're really assessing is whether you understand your numbers cold, whether you're honest about what's not working (nobody trusts a founder with no weaknesses), and whether you'll adapt when the plan meets reality, which it always does. A founder who says 'I don't know, but here's how I'd find out' often lands better than one who bluffs a confident answer to a question they haven't actually thought through.
Investors aren't betting on your forecast. They're betting on whether you'll still be making good decisions eighteen months from now, when the forecast is already wrong.
Why you actually need the money
A specific, credible use of funds beats a vague one badly. 'We'll use it for growth' tells an investor nothing and quietly signals you haven't thought it through. 'This buys us twelve months to prove the sales channel that's already converting at a rate we can show you' tells them exactly what their money does and what happens if it works. Investors aren't funding a dream in the abstract — they're funding a specific, testable next step.
The exit, even if nobody says it out loud
It can feel crude to think about at the pitch stage, but formal investors are eventually looking for a way to get their money back with a return — through a sale, a larger raise, or eventually profit distributions. A business that's structurally never going to be attractive to a future buyer, or that the founder has said outright they never intend to sell, is a much harder sell to an investor who needs an eventual exit, even if the business itself is genuinely good. It's worth knowing which kind of investor you're talking to, and being honest about which kind of business you're building.
The market matters more than the mission statement
Founders often lead with why they're passionate about the problem. Investors are usually more interested in a colder question: how big is this market really, and is it growing? A brilliant product in a small, static market is a good lifestyle business, not an investable one — and no amount of founder enthusiasm changes that maths. This isn't a knock on smaller markets; plenty of excellent businesses live there and never need outside money, which loops back to the earlier point about knowing which kind of business you're actually building before you go looking for a cheque.
Due diligence is a two-way street
It's easy to forget, mid-pitch, that you're also assessing them. A good investor brings more than money — genuine industry contacts, experience scaling a similar business, a calm head when things go wrong. A bad one brings pressure, mismatched expectations and a board seat you'll be stuck with for years. Before accepting any offer, talk to founders of other businesses that investor has backed, ideally ones that hit a rough patch, and ask how they actually behaved when things weren't going well. Their answer under a good investor and a hands-off one are very different, and it's far cheaper to learn that before signing than after.
The questions that reveal more than the pitch
Experienced investors often learn more from how a founder handles hard questions than from the deck itself. What happens to the business if your biggest customer leaves? What's your actual cost to acquire a customer, and has it been getting better or worse? Who on the team could you least afford to lose, and what's the plan if they left tomorrow? These aren't gotchas — they're the questions that separate a founder who's genuinely run the numbers from one who's memorised a pitch. Preparing honest, specific answers to the uncomfortable questions matters more than polishing the slides nobody will remember.
The unglamorous truth
Most of what actually gets deals done is less exciting than the pitch-deck templates suggest: real evidence the thing works, a founder who's credible under pressure, a specific and sensible use of the money, and a plausible path to the investor eventually getting a return. Founders who obsess over deck design and forecast polish are usually optimising the part that matters least. The unglamorous groundwork — real traction, real numbers, real honesty — is what actually gets the cheque signed.
Common questions
How much traction do I need before an investor takes me seriously?
Enough to show the model works, not enough to show it scales — and there is no threshold number, whatever anyone quoting one tells you. What an investor is testing is whether anything happens when nobody is being persuaded: customers who came back without a discount, a second and third sale through the same channel at a similar cost, a renewal nobody had to chase. Twelve paying customers with 80% of them still there a year later says far more than a thousand free sign-ups. If none of that exists yet, you are raising too early, and the honest fix is a smaller amount from people who back founders rather than metrics — friends, family, or an angel who knows your sector well enough to judge the idea before the evidence arrives.
What are SEIS and EIS, and does my business qualify?
They are the UK tax reliefs that make backing an early-stage company worth an investor's risk, and for a first raise they are often the difference between a yes and a polite no. Under SEIS an individual gets 50% income tax relief on up to £200,000 invested in a tax year, and your company can raise £250,000 in total — but only if it has been carrying on its trade for under three years, has gross assets of £350,000 or less, and fewer than 25 full-time-equivalent employees. EIS gives 30% relief on up to £1 million a year, against a £12 million lifetime cap for the company. Apply to HMRC for advance assurance before you pitch: it is discretionary and not compulsory, but angels routinely ask to see it.
How much equity should I give away in a first round?
Less than you will be tempted to, and the arithmetic matters more than the convention. Work out exactly what the money buys — twelve months of runway, one specific hire, a channel test — then ask whether the business ends that period worth more than the slice you gave up. Hand over 20% and the business has to be worth more than a quarter larger *because of* that money, not merely alongside it, before you are ahead. Then look at where it leaves you after the next round, because dilution compounds. Founders who give away half at the first raise routinely find the second one impossible: no later investor wants a founding team without enough left to keep them in the building for another five years.
What actually happens in due diligence?
An investor's adviser checks that what you said is true, and it is more mundane and more forensic than founders expect. Expect requests for statutory and management accounts, up-to-date Companies House filings, the cap table, employment contracts, customer contracts, and the bank statements behind your revenue figures. Three things kill more small deals than any commercial concern: intellectual property still owned by a freelancer who never signed an assignment, a co-founder holding shares with no shareholders' agreement in place, and revenue recognised for work not yet delivered. All three are fixable in advance and expensive to fix mid-process, when a delay reads as a warning sign. Spend a weekend tidying the paperwork before you pitch, not after the term sheet lands.
Is a convertible loan note better than selling equity now?
It is faster and cheaper to document, which is why early rounds often use one, but it postpones the valuation argument rather than winning it. A convertible note is money now that converts into shares at the next priced round, usually at a discount and sometimes with a valuation cap — so the dilution still arrives, you just cannot see how much of it until later. The important UK catch is that SEIS and EIS relief is not available on a straightforward convertible loan, which can make the instrument a poor trade for exactly the angel investors most likely to back you. Advance subscription agreements are the usual workaround. Take proper advice on which structure fits before you offer either.
