The 6 Main Investor Trends for 2023

10th January 2023

Author
James Church
Author, Investable Entrepreneur and co-founder, Robot Mascot

As the world begins to recover from the pandemic and businesses start to look towards the future, it’s important for founders to be aware of the key trends that are shaping the investment landscape.

In this article, we’ll look at six key trends that are likely to be prominent in 2023, including the fact that it’s taking longer for investors to make decisions, the increased emphasis on due diligence, the expectation of smaller or longer rounds of funding, the end of the “build it and they will come” mentality, the ongoing debate between profit and growth, and the enduring but evolving role of online fundraising and face-to-face meetings.

1. It’s Taking Longer for Investors to Make Decisions

Making decisions - Investment Trends - Robot Mascot

One trend that is likely to continue in 2023 is the fact that it’s taking longer for investors to make decisions. This is partly because the pandemic has disrupted traditional ways of doing business, with many investors opting for more cautious and deliberate approaches to investment. Additionally, the economic uncertainty caused by the pandemic has made investors more risk-averse, leading them to take longer to evaluate potential investments and ensure that they are making informed decisions. As a result, entrepreneurs and startups should be prepared for longer wait times when seeking funding. They should make sure to clearly communicate the value and potential of their business to potential investors.

2. Investors are Doing More Due Diligence

Due Diligence - Investor Trends - Robot Mascot

In line with the trend of taking longer to make decisions, investors will likely be doing more due diligence in 2023. This means that they will conduct more thorough research and analysis on potential investments, including reviewing financial documents, conducting market research, and speaking with industry experts. While this can be time-consuming, it’s important for entrepreneurs and startups to be transparent and open with potential investors, as this will help build trust and increase the chances of securing funding.

3. Investors are Expecting Rounds to be Smaller (or Last Longer)

Smaller Rounds - Investment Trends - Robot Mascot

Another trend that is likely to continue in 2023 is the expectation of smaller rounds of funding or longer rounds of funding. This is partly due to the fact that the pandemic has disrupted traditional funding models, with many investors opting for a more phased approach to investment. Additionally, the economic uncertainty caused by the pandemic has made investors more cautious, leading them to opt for smaller or longer rounds of funding as a way to mitigate risk. As a result, entrepreneurs and startups should be prepared for the possibility of smaller or longer rounds of funding. They should make sure to communicate their funding needs and milestones to potential investors clearly.

4. The “Build it and They Will Come” Mentality is Over

Building a Startup - Investment Trend - Robot Mascot

Gone are the days of the “build it and they will come” mentality when it comes to investing. In 2023, investors are looking for businesses with a clear and well-defined target market, as well as a solid plan for reaching and engaging with that market. This means that entrepreneurs and startups should be able to clearly articulate their target market and their go-to-market strategy when seeking funding. Additionally, investors are looking for businesses with a strong track record of customer acquisition and retention, which is a key indicator of long-term success.

5. Investors are Weighing Up Profit vs Growth

Profit vs Growth - Investment Trend - Robot Mascot

In the past, investors have often prioritized growth over profit, with the assumption that a focus on growth would ultimately lead to profitability. However, in 2023, investors will likely be more focused on balancing profit and growth. This means that they will be looking for businesses with a clear plan for achieving both short-term and long-term profitability, as well as a sustainable model for growth. Entrepreneurs and startups should be able to clearly articulate their path to profitability and how they plan to achieve sustainable growth when seeking funding.

6. Online Fundraising is Here to Stay, but Face-to-Face Meetings are Back

Face to Face Meeting - Investment Trend - Robot Mascot

While the pandemic has accelerated the trend towards online fundraising, this trend will likely continue in 2023 and beyond. Online platforms such as crowdfunding websites and virtual pitch meetings on Zoom have made it easier for entrepreneurs and startups to reach a wider pool of potential investors and have helped to democratize the investment process. However, it’s also important to note that face-to-face meetings are making a comeback as the world begins to return to some sense of normalcy. While online fundraising will likely continue to play a key role in the investment landscape, it’s important for entrepreneurs and startups to also be prepared for in-person meetings and pitches, as these can be a valuable way to build relationships and showcase their business in person.

Conclusion

In conclusion, 2023 is shaping up to be an interesting year for founders, with key trends such as longer decision-making processes, increased due diligence, smaller or longer rounds of funding, the end of the “build it and they will come” mentality, and the balancing of profit and growth all likely to be prominent. This means founders must be more prepared than ever when seeking investment.

The continued evolution of online fundraising and the return of face-to-face meetings will also be important to keep an eye on. By staying attuned to these trends, entrepreneurs and startups can position themselves for success when seeking funding and growing their businesses in the long term.

If you want to raise investment this year, join us for our webinar “How to Raise Investment in 2023” on January 19th at 3pm GMT. During this webinar, we’ll discuss the key trends shaping the investment landscape in 2023, as well as practical tips and strategies for securing funding. Whether you’re just starting out on your fundraising journey or well on your way, this webinar is for you.

Don’t miss out – register now to secure your spot!

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    2023-03-09T13:08:44+00:00January 10th, 2023|Categories: Pitching, Advice|

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