A good team of investors could be the key to success for your new startup. Raising money through private equity, angel investors or venture capitalists sets you on the path to a larger market share and exponential growth. For companies with serious ambitions, the loss of control is a small price to pay. How do you prepare your business in a way that makes it attractive to investors?
Present your company audits for the past three years: Get in touch with a reputable accounting firm. Validation of your processes and numbers help your sale. It also improves confidence in your company, saves cost and time.
Build relationships: Everyone you meet is a potential investor or someone who could link you to an investor. One entrepreneur details how he met someone at Starbucks who introduced him to an investment group that put $250,000 in one of his ideas. The business went on to sell for seven figures.
Eliminate excess cost: Your business is more attractive to investors when you have a low operating cost. Maximising cashflow while showing financial control makes it easier to sell your brand to investors. The generally accepted view from the experts is that you should wait a year before seeking out outside investors. When you’re ready, eliminate all unnecessary cost that might scare away potential investors.
Start small, launch fast and scale slowly: Don’t wait until everything is perfect to get the ball rolling because it will never be. Your startup has more value when you have a working product or service than in theory. Choose your niche, preferably, something small. Test it, actively collect feedback and tweak it as you grow. You can offer a more personalised service and build a better business model with a small, niche audience.
Retain the right team of experts: A business is only as good as the people behind it. Investors don’t just access your product or business model, they assess your team. They want a company with people they can relate with. Surround yourself with experts and don’t try to do it all on your own.
Pitch a return on investment: The goal of an investor is to invest in a business model that will make them the most money. You have to highlight what your investors stand to gain from investing in your business. Focus on the benefits and clearly illustrate the timeline for return on investment.
Leverage social media: A positive image on social media does wonders for brand representation while entices investors. Connect with your desired investors on Twitter and LinkedIn. It’s a great way to gain more insight into their personality and the topics they are interested in. This helps you create a better pitch.
Persevere through everything
It’s important to remember that success doesn’t come for everyone instantly. There will be situations where you’ll think you’re in a make or break situation where things don’t go your way. Recognising the ebbing and flowing of success is a vital part of navigating the ups and downs of getting a business off the ground. The success of any business is dependent on how committed the entrepreneur is in the face of failure.