What return on investment does a Investor look for

When investing into a Start-up or established business an Investor can use several tools to guide their decision. The simplest measure is the Return on Investment (ROI) which will give the growth (or loss) of the investment over its life:

 ROI = Current or Expected Value x 100
                  Original Value

An Investor will take many things into account and may well invest into projects of lesser return that they admire or enjoy being part of, however for start-ups and young companies 30 - 40% ROI is a likely aim.

A more comprehensive measure is the Internal Rate of Return (IRR), which takes into account that money held in your hand today is worth more than the same money at some time in the future. It looks at the yearly returns for your investment over a period of time.

IRR is sometimes referred to as the discounted cash flow rate of return. The use of internal refers to the omission of external factors, such as inflation from the calculation. Since the actual calculation can be a bit long-winded, it's best to use a simple IRR calculator found in many places on-line, or use a formula put into an Excel spreadsheet for ease of use. 

 

You will no doubt however want to evaluate any investment across a range of criteria and to use professional advice. This is just a quick starting point.