Six questions investors will ask before investing in your edtech startup

Six questions investors will ask before investing in your edtech startup

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Gaining the attention of investors is not a walk to the park. It is, in fact, an herculean task laced with consistency and great vision. Investors are business-oriented individuals who want to make profits by investing in establishments with great value for their money.

Edtech is a fast-growing sector every part of the world still expect a lot from. And of course, the best is yet to come from edtech. Investors know this and they have been shifting their attention to the sector bit by bit.

For an edtech startup to gain the attention of investors is not an easy task. If you gain that attention, how do you convince the investors your startup is the right place to invest their money?

Here, we have vaticinated some of the questions investors may ask before investing in your edtech startup. We are not assuring your edtech startup that these are the questions investors will ask you. Consider this as a prognostication.

Here are some of the questions investors may want to ask your edtech startup before investing their hard-earned money:

  • How impactful do you think your service is?

We mentioned earlier that investors are profit-oriented personalities. It is seldom to meet an investor with a save-the-world intention.

Here, investors may want to know how life-impacting your startup is. They want to know the extent your startup can go in ensuring the availability of customers.

They want to know if your service is a must-have or just nice to have. If it is a must-have, it is certain the investors will be keen to invest in you edtech startups. However, if is nice to have, investors may not be willing to invest in your startup – at best, the investors will reduce the amount to be invested.

It should be noted that the customers and end-user of an edtech product are most times different. The parent or school may be the customers while the students may be the end-user.

Parents are the most concerned about their children grades. Hence, if the parents recognize that an edtech product is not improving the grades of their children, they may put a stop to using the product.

Investors want to know this because their money is at stake.

Ability to demonstrate a clear link between the edtech solution and improved academic performance to the parent(s) is crucial. 

  • Have you invested your money?

This is also referred to as skin in the game. Regardless of the sector, investors want to know how success-driven an entrepreneur is.

One of the many ways investors know this is by the investment the entrepreneurs make in their startup. The private investment an entrepreneur makes before sourcing for investments from outside.

According to a venture capitalist, Sean Wise, “There is one thing all investors require you to do before they invest their money into your venture: invest your own money into your venture. This is often called “skin in the game” and it’s a key signal for all investors. Skin in the game refers to what the founders have personally committed to the company–what they have at risk if everything goes to zero.”

Warren Buffet once said, “The most important investment you can make is in yourself.”

So, invest in your business befie anyone else does. It is an advice.

  • What can be used to measure the outcome of your service or product?

Investors like to know the outcome of using the product or service of the edtech startup. They want to know the positivity linked to using the product or service of the startup like better grades, being admitted to elite institutions for higher studies or better job prospects in the future.

Investors will be motivated to pay a large sum into an edtech startup with positive outcome and a means to measure the outcome.

  • Is this saleable to learners of different economic backgrounds?

Here, investors want to know the extent of the availability of the project to everyone – if possible.

The edtech field is vast field with a lot of positive outcome. However, not everyone will have a uniformity in likeness of an edtech’s product or service.

This means that an edtech product or service should be accessible to people varying economic background.

This will surely bolster the income of the startup.

  •  Are You Selling Your Product or Service to Schools?

Schools are customers to edtech startups. There are no doubts that schools are one of the easiest way to sell products or services.

However, selling to schools could be tricky. This is because selling to schools has a unique set of challenges. A long sales cycles (6-12 months) and rigidity in the existing system makes it difficult to quickly implement solutions. 

This can also be a productive long term engagements. An experienced sales person who can effectively sell to schools and find solution that suits the school’s framework is one way to merry-go-round this.

  • Is the service or product good enough to get customer to pay every year?

Investors may want to know if your service is worth subscribing to every year. This may also be a means to measure the consistency of an edtech product or service. It also explains keenness the customers exhibit – schools and parents depend on your service or product.

The product or service needs to demonstrate that it provides enough continued value to the end user. Know that the end users may not be the customer – the customers may be the decision makers for the end users.

In a case where the end users are learning or patronizing your product to upskill for career growth, the learners are largely your customers. Here, we are referring to graduates and undergraduates.

In such case where the customers are different from the end users, the edtech startup should be result-oriented.

A parent with no positive result in her son academic performance may want to go for another product or service.

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