So, learning a bit from my successes, but mostly from my failures, is a handy 5-point advisory comprising interesting and practical tips that can help you raise the required funds for your new business.
Here are 5 golden tips for everyone planning to raise money for their ventures.
1. Research your investors before going for a pitch
Not all investors are the same. Before you approach anyone to present your idea, it is extremely important to thoroughly research your investor. Investors come in all shapes and sizes. They have their unique interests, identities, and personalities. They also have their preferences about where they want to invest, how much they want to invest, and at what stage of a business venture.
To know more about your investors, it is always preferable to do research on your own. Check out their websites and go through the information they have provided. Reach out to the portfolio founders of VCs and enquire about their experience of working with the investors. This will enlighten you about their core values.
Always remember, investors expect you to know about them and more importantly, never forget to ask about how that investor can make life difficult for you.
2. Sell your idea in no time
It takes a few minutes for someone to decide if they want to know more or have heard enough. While pitching to an investor, avoid long conversations in the very first meeting. Just describe your idea in a few words and let them know what you want clearly. It will sustain the interest of your listeners and will enable you to sell your idea quickly.
Your pitch should explain the opportunity, highlight how your venture will make money, and the potential of the market. Convey your business idea as clearly and as focussed to keep your potential investors interested.
If you can explain your idea in three minutes, it will be greatly appreciated by any investor, whether they are interested in investing in your business venture or not.
3. Avoid long presentations
Whether you realise it or, not every time you open your mouth, you are promoting yourself and your business. So, while presenting a venture, it is important to get to the point instead of describing the entire business gamut. Just focus on the core idea of your startup, stick to the basics of the business model, explain the costs of running the venture, the profits generated, and the target customers.
Keep the presentation short and simple while addressing the key details of the venture. Create slides that contain only the essential information and if possible, have one slide for one topic. If you need to display more information, you can have additional slides if someone raises a question. This will streamline the presentation and not drive the investors away with boredom.
4. Highlight your financial forecast
It is important to outline the projected financial outcomes of your company along with the relevant assumptions. This will allow the investors to evaluate the attractiveness of their potential investment in your company.
Investors are more interested in how your venture will make a profit and overcome the initial investment. They want to know your business model and see the potential of your idea before they decide to invest in it. By giving them numbers and predictions, it will provide them with a clear image of what to expect from your venture in the future. This will allow them to make the decision if they want to join hands with you or not, with ease.
5. Seek the attention of only those who truly believe in your product/idea
Although true in most cases, more so for the first-timers. In today’s uncertain business environment, your business can take a sudden downturn, or the market dynamics may change overnight! So, you must always choose people who believe in you and your products regardless of what has happened.
You may be wondering at this juncture as to how to recognise an investor who believes in your product. But trust me, it will become clear to you at the very beginning. Getting the attention of such people would always be a great support for you.
Funding your idea is the most important thing to focus on. According to a recent study, most new businesses fail in the initial period of their operation due to lack of adequate and sustained funding.
So, friends and future entrepreneurs, always treat the above 5-point advisory as the mantra for successful initial funding. Wishing you all the very best in your endeavours!