The search for investors can be a never-ending quest for startups. Investors equal capital and capital is the lifeblood of a young business. You can use that capital to grow your team, develop your products, acquire customers, and extend your startup’s runway.

Unfortunately, many startups never find the funding they need to continue operations. In fact, according to a study from CB Insights, less than half of startups make it to their second round of raising capital. Only 30% make it to the third round and less than 10% make it to a fifth round.

What do those few successful startups have in common? Why do investors want from startups, and what are those companies doing right? Every investor has their own set of qualities and expectations that they look for in a startup. However, there are a few traits that seem to be common among successful companies who are able to raise multiple rounds of investment:

Founders With Skin in the Game

When an investor decides to invest in your startup, he or she isn’t just investing in your company. They’re also investing in you personally as the founder. The startup began as your idea. It’s driven by your vision. Your investors believe in your concept, but they’re also putting their faith and trust in you to make the concept and vision a reality.

How can you show potential investors that you are trustworthy? One of the best ways is to make your own investment in the company. Investors love seeing a founder who is passionate and has skin in the game.

Have you contributed your own money to the business? Have you sacrificed in other ways? Perhaps by leaving behind a lucrative career or passing up on financially-rewarding job opportunities? It may also look attractive to investors if you’ve raised money from friends or family, putting your reputation on the line.

Investors want to know that you have too much invested in this idea to simply walk away when something better comes along. If you have skin in the game, they’ll feel more comfortable trusting you with their investment.

Sizable Market Potential

Investing in a startup is a risky proposition. Startup investors usually know that they likely won’t see a return on their investment. For every startup investment that does work out, there are multiple that fail.

If failure is so common, why do investors continue to put money into startups? Because when they do work out, the payoff is usually substantial. Startup investors are willing to suffer through frequent losses while they wait for the one successful investment that will provide a massive return.

When an investor is evaluating your company, they want to see that your company can scale and eventually provide a return that is multiples of their original investment. You’ll need to show them that there is a sizable market for your product or service.

How is your business designed to scale? Right now you may be providing products to a niche group or to a small geographic location. What’s the next step for expansion? How do you grow the market to go nationwide or even worldwide? When you pick your first product or market, make sure it’s a sizable one that the business can grow into. Investors want to see that kind of long-term vision.

Proof of Concept

Your idea may have exciting potential. However, as former University of Texas football coach Darrell Royle once said, “Potential just means you ain’t done it yet.”

Investors want to see a concept that has been put into action. What steps have you taken to test your idea? Do you have substantial sales yet? If you can’t bring your idea to market yet, start looking at what you need to make that happen. Often an investor is going to be looking at an investment opportunity with the intent that their funding will help you reach the next product or growth milestone. Show them how you’re going to get there.

An Experienced, Skilled Team

Investors have to trust you as the founder, but they also want to see that you have a capable and qualified team around you. There’s only so much you can do as a founder. In the early days, you may be able to act as the director of sales, customer service, marketing, and product development. But that can’t go on forever. Eventually, you’ll need to delegate to a team so you can focus on the big picture.

Who is on your team? How do your team members fill important gaps and expand the capabilities of your company? How do you plan to use your investor’s capital to grow your team? It’s important to highlight your team in conversations with investors, and that you’re making smart hiring decisions. Remember, they’re not just investing in you, but rather the company as a whole.

An Exit Strategy

Above all else, investors want to get a return on their investment. Granted, most investors know that the return could be years away. However, they want to know that there is some long-term path to a potential return.

That return usually comes in the form of an exit strategy. What are the possible exit strategies for your investors? Could you be acquired by a competitor or a strategic partner? Are you shooting for an IPO down the road? What’s the ideal scenario in which you and your investors achieve a return?

Obviously, you can’t predict the future, especially when the exit could be years or even decades away. However, you can at least project potential scenarios in which your investors could capture a return. They don’t need to know exactly how the exit will happen, but rather feasible scenarios in which it could happen.