If you’re looking for funding, you probably know that investors see hundreds of business plans. But here’s the thing — most of those plans end up in the trash. Why? Because they miss the mark. They fail to answer the core questions investors care about. We’ve studied what investors actually want. We’ve looked at data and surveys from angels, VCs, and private equity firms. This article breaks it all down — with real stats and clear advice for every step.
1. 78% of investors say a strong founding team is the most critical element of a business plan
You could have the best idea in the world, but if your team doesn’t inspire confidence, investors won’t bite. They bet on people, not just concepts. Why? Because things change. Markets shift. Products evolve. But a capable, driven, and experienced team can adapt.
So what do you do?
First, highlight your team’s experience. But don’t just throw in resumes — connect the dots. Show how your CTO’s background in machine learning helped build your tech. Explain how your COO scaled a startup to $10 million in revenue. If you have a founding story that shows grit, tell it.
Also, talk about your chemistry. Investors love teams that know how to work well together. Mention how long you’ve known each other or what you’ve built together before.
Finally, be honest about the gaps. If you’re missing expertise, show that you know and that you’re actively hiring or bringing in advisors.
The goal? Make investors think, “I trust this team to figure it out.”
2. 65% of venture capitalists prioritize market size as a top decision factor
Investors want to back companies with big potential. If your market is small, your return will be too. That’s why market size — also called TAM (Total Addressable Market) — is so important.
But don’t just throw out a huge number. Saying your market is “everyone with a phone” doesn’t help. Investors want to see how you got your numbers.
Break it down. Start with a clear definition of your core market. Then expand into your serviceable market — the customers you can realistically reach now. Use third-party research if you can, but apply your own logic too. Show your method.
Say you’re launching a fitness app. Don’t just say the global fitness market is $100 billion. Instead, talk about how many users are already on fitness apps, what they spend, and where you fit in.
If you’re in a niche market, that’s okay too — as long as you show how it can grow or lead to something bigger.
What investors want is a path to scale. Show them that your market is worth chasing — and that you know how to carve out your share.
3. 72% of angel investors reject business plans with unclear revenue models
If you can’t explain how you make money, you lose trust. Quickly.
Investors don’t expect you to be profitable on day one. But they do expect a clear plan for getting there. That starts with your revenue model — how you actually bring in cash.
Are you charging per unit? Subscriptions? Ads? Partnerships? Licensing?
Be specific. Let’s say you’re building a SaaS tool. Break down how much you’ll charge per user, how often, and what upsells or expansions look like.
Also, show your assumptions. How many users do you need to break even? What’s your average lifetime value? How long does it take to recover customer acquisition costs?
Don’t leave this vague. A fuzzy revenue model signals that you haven’t thought it through. Worse, it makes investors think you’re winging it.
You don’t have to have every answer — but you do need a logical, realistic path to revenue. And you need to show you’re open to tweaking as you learn.
4. 80% of investors require detailed financial projections for at least 3-5 years
This isn’t about guessing the future. It’s about showing that you understand your business mechanics.
Your financial projections should include revenue, costs, margins, and cash flow. Break it down by quarter if possible, especially in year one.
Don’t just hand over a spreadsheet — walk investors through your logic. Explain what drives each number. Maybe it’s customer growth. Or product pricing. Or hiring plans.
Make sure your assumptions are realistic. Too aggressive and you’ll look naive. Too conservative and you’ll seem unsure.
Also, consider including a base case, best case, and worst case. It shows you’re thinking critically about risk.
And yes, be prepared to defend every line. If you can’t explain where a number comes from, don’t include it.
Good projections don’t just show how much money you’ll make. They show how well you know your business.
5. 60% of investors lose interest if the executive summary is poorly written
Your executive summary is your first impression. If it’s weak, the rest of the plan may never get read.
This section should be short — ideally one page. But it should pack a punch.
Include what your company does, who it serves, the problem you solve, your solution, market size, traction (if any), your team, and how much funding you’re raising.
Make it crystal clear. No buzzwords. No fluff. If an investor can’t understand what you do in 60 seconds, you’ve already lost them.
Think of it like your elevator pitch — but written down.
And here’s a pro tip: write this last. Once you’ve nailed every other section, it’ll be easier to summarize the key points in a compelling way.
6. 67% of investors expect a clearly defined competitive advantage
It’s not enough to be good. You have to be different. Better. Harder to copy.
Your business plan should clearly answer: “Why us?”
That means showing your competitive edge. Maybe it’s your tech. Or your data. Or your brand. Maybe you’ve built a community that others can’t replicate.
Whatever it is, spell it out. Don’t just say “we have better service.” That’s vague. Show why your service is better — and why that matters.
Also, map out your competitors. Name them. Describe what they do well. Then explain how you win.
It’s okay to have competitors. In fact, it’s expected. A market with no competition often means no demand.
What matters is how you stand out — and stay ahead.
7. 59% of investors cite scalability potential as a major investment criterion
Investors want to know: can this grow big?
That’s scalability. It means your business can grow fast without your costs growing just as fast.
So show them how.
If you’re a tech company, talk about how your product can be delivered to more users with minimal extra cost. If you’re a service business, explain how you can automate or train others to deliver it at scale.
Also, mention your systems. Have you built processes that can handle more volume? Can your platform support 10x the users?
Scalability isn’t just about tech. It’s also about strategy. Do you have partnerships lined up? A clear marketing funnel? A repeatable sales process?
Investors want to see that you’re not just building a business — you’re building something that can grow, fast.
8. 74% of investors assess the team’s relevant industry experience
Knowing your industry inside out gives you an edge. It helps you move faster, avoid rookie mistakes, and build the right product.
Investors know this. That’s why they look for founders with relevant experience.
If you’ve worked in the space before, highlight it. Talk about what you learned. Mention past roles, companies, or problems you’ve solved that connect to your current startup.
If your team doesn’t have direct experience, bring in advisors who do. Or show how you’ve done deep research, interviews, or user testing to close the gap.
What matters is that you understand the landscape — the players, the pain points, the pitfalls.
Show investors you’re not guessing your way through. You know this world, and you know how to win in it.
9. 55% of investors reject pitches lacking clear customer acquisition strategies
How will people find you? And why will they care?
That’s the heart of customer acquisition. It’s not enough to have a great product — you have to get it in front of the right people.
Start with your audience. Who exactly are they? Be specific.
Then lay out your plan. Are you using paid ads? Content? Partnerships? Referrals?
Give details. If you’re running Facebook ads, mention your target cost-per-click. If you’re doing SEO, talk about your keyword plan. Show that you’ve tested some channels — even if just with a small budget.
Also, think about retention. How will you keep users coming back?
Investors want to see a clear, cost-effective path to growth. Show them you’re not just building something great — you know how to sell it too.
10. 68% of investors are influenced by a founder’s ability to pitch confidently
A great idea means little if you can’t communicate it. Investors don’t just invest in your product — they invest in you. That’s why how you pitch matters almost as much as what you pitch.
Confidence doesn’t mean arrogance. It means clarity. It means being able to explain your business, your market, and your numbers without fumbling. It means answering questions without getting defensive.
Practice helps. Rehearse your pitch out loud. Get feedback. Anticipate tough questions and prepare real answers. The more familiar you are with every part of your plan, the more naturally you’ll speak about it.
Remember, investors want to know: can this person lead a team? Convince customers? Rally others when things go sideways?
A strong, clear, and calm pitch goes a long way toward earning that trust. Own your story — and tell it like you believe in it.
11. 61% of investors expect a business plan to include detailed market research
Saying “we know our market” isn’t enough. You have to show it.
That means digging into your audience — their behavior, their preferences, what they buy, and why. Use real data, not assumptions. Quote reputable sources. Or better yet, run your own surveys or interviews.
Break down your customers by segment. Who are your early adopters? Who might come later? How big is each group?
Also, look at trends. Is the market growing or shrinking? Are there new technologies or shifts that support your timing?
Market research proves you’re not operating in a bubble. It shows that you’ve validated the opportunity — and that you’re building something people want.
12. 52% of investors reject plans with overly optimistic financial assumptions
Yes, you want to excite investors. But if your numbers look like wishful thinking, you lose credibility.
Overly rosy projections — like 1000% year-over-year growth with no marketing budget — raise red flags. They say you don’t understand your own business or market.
Be optimistic, but grounded. Use benchmarks. Compare yourself to similar companies at your stage. If you’re early-stage SaaS, research typical growth curves, churn rates, and customer acquisition costs.
Investors know things rarely go exactly as planned. They’re looking at how you think — not just what you think.
If your numbers show that you’ve done your homework, tested assumptions, and built a realistic model, that goes a long way.
13. 76% of investors prefer startups with some form of traction or MVP
Ideas are cheap. Execution is what matters. That’s why traction — even a little — carries so much weight.
Traction can mean many things. It might be users, revenue, email signups, pilot customers, partnerships, or even early media attention.
If you have an MVP (minimum viable product), show it. If you’ve run tests or pre-sales, share the results.
Don’t wait for everything to be perfect. Investors want to see progress, not polish.
Even if you’re pre-revenue, demonstrate momentum. Show that you’re not just dreaming — you’re doing.
14. 70% of investors want to see how funds will be specifically allocated
Asking for money is one thing. Knowing how to use it wisely is another.
Investors want to know where their money is going — and why.
So be specific. Break down your funding ask by category. How much will go to product development? Marketing? Hiring?
Explain the timeline too. When will you need the money? How long will it last?
Also, link spending to outcomes. Don’t just say, “$200K for marketing.” Say, “$200K to acquire 10,000 users through proven channels.”
This builds trust. It shows that you’re thoughtful, strategic, and accountable.
15. 63% of investors look for a clearly stated exit strategy
No investor puts in money just for the fun of it. They want to know how — and when — they’ll get their return.
That’s your exit strategy. It could be an acquisition, an IPO, or even a buyback.
You don’t need to promise a specific exit date. But you should show that you understand what potential exits look like in your industry.
Have other companies like yours been acquired? By who? At what valuations?
Explain your thinking. What makes your business attractive to buyers down the line?
Even if your focus is on building a great company, acknowledging the exit path makes you look more complete — and more fundable.
16. 57% of investors consider intellectual property a valuable asset in a plan
If you have unique technology, content, or processes, protecting them is a smart move.
Intellectual property (IP) can give you an edge. It makes it harder for others to copy you and adds value to your business.
Mention any patents, trademarks, or copyrights you have — or are applying for. If you own proprietary data or algorithms, talk about them too.
But don’t fake it. If you don’t have formal IP, that’s okay. Focus on what makes your offering hard to replicate — your execution, network, insights, or brand.
Still, if IP could play a role in your strategy, show that you’re thinking ahead.
17. 64% of VCs want founders to acknowledge potential risks in the plan
Nobody expects your business to be risk-free. In fact, pretending that it is makes you seem less prepared.
Smart investors want to see that you know the risks — and have a plan to manage them.
What could go wrong? Maybe it’s regulatory changes, customer adoption, competition, or technical hurdles.
Be honest. Then explain what you’re doing to reduce those risks. Maybe it’s building a buffer in your budget, diversifying suppliers, or running early validation tests.
This shows maturity. It shows that you’re not just chasing upside — you’re thinking long-term.
And that builds investor confidence.
18. 69% of investors are more likely to invest if the business addresses a clear pain point
People don’t buy products. They buy solutions to problems.
That’s why investors gravitate toward businesses that solve real, painful issues.
So dig into the problem. Who feels it? How often? What happens if it doesn’t get solved?
Then show how your product fixes it — better, faster, or cheaper than current options.
If you’ve talked to users, include quotes or stories. If people are already paying you to solve the issue, even better.
The more real the pain, the more urgent the need — and the more compelling your business becomes.
19. 73% of investors say product-market fit is essential to gain their trust
You might have a great product. But does anyone want it? That’s what product-market fit is all about.
It’s the point where your product clicks with the market — where people don’t just like it, they need it. They use it, pay for it, and tell others about it.
Investors look for signs that you’ve hit or are approaching that sweet spot. They’ll ask: Are users coming back? Are they referring others? Are you growing without pouring in massive ad spend?
So how do you show this?
Use real data. Share retention numbers, customer feedback, or sales growth. Even a small group of passionate users can be proof that you’re solving something meaningful.
If you’re still early, show how you’re testing for product-market fit. Run interviews. Launch small pilots. Learn fast.
The message to investors should be: “We’re listening. We’re adapting. And we’re getting closer every day.”
20. 62% of investors prefer a business plan that includes customer testimonials or early feedback
Nothing beats real voices from the market. When you include customer testimonials, investors hear more than just your perspective — they hear from the people who matter most.
It doesn’t have to be fancy. Even a simple quote like “This saved me hours every week” can speak volumes.
Try to collect feedback early — from pilot users, beta testers, or even those who just tried a prototype. Ask what they liked, what they didn’t, and what they’d pay.
Then use those insights in your business plan.
It shows you’re not just building in isolation — you’re co-creating with your audience. That’s powerful.
21. 58% of investors are deterred by jargon or overly complex language
If investors can’t understand your business in plain language, they won’t fund it.
Tech founders often fall into this trap — using buzzwords or acronyms that sound impressive but confuse readers.
Keep it simple. Imagine explaining your idea to a friend at a coffee shop. How would you say it then?
The goal is clarity. Not just because it helps investors understand, but because it shows you understand.
If you can explain something complex in a simple way, it proves you’ve done the work of thinking it through.
So avoid the fluff. Ditch the buzzwords. Speak like a human.
22. 77% of investors appreciate visual aids like charts and graphs in business plans
A wall of text is hard to digest. Visuals help.
Charts, graphs, and diagrams break up the page and make your message easier to absorb. They also make your business look more professional and structured.
So where should you use visuals?
Try showing your growth curve, customer funnel, go-to-market roadmap, or financial forecasts as charts. Use infographics to explain your product or competitive landscape.
But don’t overdo it. Each visual should make something clearer — not just decorate the page.
And make sure they’re accurate. Misleading visuals kill trust fast.
23. 60% of investors want to see evidence of cost-efficiency or lean operations
Throwing money at a problem isn’t impressive. Solving it efficiently is.
Investors respect startups that know how to do more with less. That means lean operations, smart budgeting, and creative problem-solving.
So highlight your scrappiness. Maybe you built an MVP with a tiny team. Or used no-code tools. Or bartered services.
Show how you’re getting results without overspending. And how you plan to keep that discipline as you grow.
This doesn’t mean being cheap. It means being smart — and proving you can manage investor money wisely.
24. 71% of investors consider the timing and trends in the market
Sometimes, it’s not just what you build — it’s when you build it.
Investors love businesses that ride the wave of bigger trends. Timing can turn a good idea into a breakout one.
So ask: Why now?
Are there new technologies, regulations, or cultural shifts making your solution more needed than ever? Is the market exploding or about to?
Use data and examples. If user behavior is changing, show it. If your competitors are getting acquired, highlight that momentum.
Convince investors that this is the perfect moment to invest in what you’re building.
25. 56% of investors reject business plans with unclear monetization strategies
Even if your product is exciting, investors still want to know — how will it make money?
A weak or confusing monetization plan makes them nervous. It suggests you haven’t figured out how the business works at its core.
So spell it out. Are you charging subscriptions? Taking commissions? Licensing tech?
Be specific about pricing, margins, and how much value you create for your users.
If you’re free at first, explain your path to monetization. Freemium? Ads? Premium features?
Monetization doesn’t need to be complex — but it needs to be clear.
26. 66% of investors expect the business plan to outline specific KPIs
KPIs — key performance indicators — help investors see how you’ll measure success.
They show what you’re tracking, how you’re growing, and what matters most to your business.
Don’t just throw in generic metrics. Pick the ones that actually drive your model.
For SaaS, it might be monthly recurring revenue, churn, or CAC. For marketplaces, it could be GMV or transaction volume. For apps, maybe daily active users or retention.
Explain why each KPI matters — and what your targets are.
This gives investors a clear way to track progress — and hold you accountable.
27. 75% of investors value transparency over perfection in financials
Nobody expects your numbers to be perfect. They just expect them to be honest.
If something’s uncertain, say so. If a cost might go up, flag it. If you don’t know something yet, admit it — and share how you’ll find out.
Investors value founders who are transparent. It builds trust.
Trying to hide weaknesses will backfire. Investors are trained to spot red flags. When in doubt, put your cards on the table.
They’d rather see a thoughtful, transparent founder than a “perfect” one who’s faking it.
28. 53% of investors are more inclined to invest in founders who have failed before and learned from it
Failure isn’t the problem. Not learning from it is.
If you’ve had a past venture that didn’t work out, don’t hide it. Own it. And show what you took away from the experience.
Maybe you learned how to manage a team, test faster, or handle customer feedback.
Investors know the startup journey is tough. Experience — even from failure — matters.
What they want to see is self-awareness, growth, and resilience. Show that you’re not just a dreamer — you’re a builder who’s battle-tested.
29. 69% of investors say a solid go-to-market strategy heavily influences their decision
How will you reach customers — and scale?
Your go-to-market (GTM) strategy explains how you’ll attract, convert, and retain users. It includes your target channels, messaging, pricing, and launch plan.
Investors want to see that you’ve thought this through. Who are your early adopters? What’s the best way to reach them?
Be specific. If you’re targeting enterprise clients, what’s your sales cycle? If you’re doing DTC, how will you break through the noise?
Include early wins if you have them — like waitlists, partnerships, or pilot customers.
A solid GTM plan turns your business from theory into execution.
30. 70% of investors expect businesses to show how they will sustain competitive advantage over time
Winning once is great. Staying ahead is even better.
Investors want to know: how will you stay competitive?
That could be through continuous innovation, customer loyalty, data advantages, or economies of scale.
Explain your moat. Is it tech? Speed? Network effects?
Also, think long-term. As the market evolves, how will you evolve with it? How will you respond to new players?
Show investors that you’re not just building for today — but defending your position for the future.
Conclusion
Investors are looking for clarity, conviction, and capability. Your business plan is your chance to show all three.
Don’t try to impress with jargon or inflated numbers. Focus on being real. Show what you’ve built, what you’ve learned, and where you’re going next.
