The big investors like Sultan Alhokair look into a company heavily before making an investment. Any major angel investor is going to want some assurances before they put up capital, and hope that a company can deliver a return on that initial investment. Here are a few of the standards that they look to, and that a company needs to be able to provide as reassurance:

1. Potential for a return on the investment.

That means real market data that proves there is a demand for the product. Something that shows there is nothing like this on the market, and that they have an original product that has the potential to garner interest and take control of a large share of the market.

1. Customer validation.

Market research that shows people would be interested in this type of product. That means surveys, or any other type of actual customer research that shows they are looking for these sorts of products, and that they would be interested in what you have to offer.

1. Exit strategy.

Every seed funding investor wants to know what the exit strategy is going to be if the idea doesnt work out. That means how the company recoups the initial investment partially, or wholly, by selling off assets to pay back those initial investments. This is important, because most companies do fail. Very few get off the ground and become major successes.

Take it from Sultan Alhokair, there are some big mistakes that new venture capitalists make when looking into a new investment. Understanding what youre paying for, and being careful about how you spend your money is key to ensuring that your investments will pay off in the long term.

Thats why you have to think about them differently, and really ensure that youre not taken advantage of by an entrepreneur that just happens to be a good salesman.

1. Crunch your own numbers.

Youre going to get a lot of numbers thrown at you in an investor meeting. But you need to crunch them yourself, based on your own knowledge of the industry, to ensure that they seem to make sense. Sometimes an entrepreneur is going to fabricate the numbers that they give you, to inspire you to invest in their product. Dont fall victim to someone, and always double check their work.

1. How easy is this product to replicate?

When innovation comes about through a tech start-up, the major corporations are quick to jump on their idea and create a competing product. How quickly will they be able to do this? A new product is only going to have so long before its likely overrun by the major corporations with more money. You need a good margin to profit, before you have to pull out of a product when that inevitably happens.

1. Make sure theres an exit strategy.

If a presentation doesnt have an exit strategy for capital investors, then you need to avoid that product. No matter how good things look, the odds are always stacked against success. Thats why you have to be careful, and why you have to choose your investments intelligently, making sure that theres a way to recoup as much of your investment as possible.

Seed funding is what a company needs to get off the ground. These are the initial investments that actually pay a companys start up costs, when they decide to launch a product or service. That means needing investors, but there are a ton of deal-breakers that come with investors.

Even when an investment looks like its going to happen, there are some pitfalls that can destory a deal before you have the chance to make that final handshake. Sultan Alhokair takes a look at a few signs the investment just isnt going to work out:

Lack of belief in the idea.

Showing a lack of belief is the cardinal sin when it comes to seed funding. A creator that cant back up their own product with belief, is not going to attract any investors. They wont have the work ethic to take things all the way, and without passion theres no way a product is going to be able to come to light as originally planned.

Lack of direction

Without exemplifying the ability of a brand to take off, there is no way an investor is going to be interested. A well laid out plan is a must, and making sure you cover all investor concerns is vital.

No concise presentation

Making your ideas come across clearly means having a short and professional presentation which outlines all of your ideas. That means using a common format like PDF, or Power Point, which are some of the industry standards. A presentation that doesnt flow well, and that doesnt translate information very quickly and easy, is not going to succeed.