Most entrepreneurs have one thing in common: they are totally in love with their company and their product. They are passionate, enthusiastic and optimistic. They can’t wait to tell everyone how their idea or product will change the world.
- During my decades of raising capital and running start-ups, I have learned a few things about preparing for investor meetings. If you’re scheduling appointments with people who have the potential to write big checks, I recommend that you go your own way
the complete list. Following these guidelines will help you get funding and create valuable partnerships.
- Do your homework: Create a target list of “smart money” investors and do your homework on each potential client. Raising funds for your business is like any sales system. Gather leads, sort and prioritize those leads, and go through a process, typically using a tool like a sales funnel.
- When entrepreneurs are faced with a fundraising challenge, most entrepreneurs will call anyone and anyone with an “angel investor” or “venture capitalist” sign on the door. This is a process, I suppose.
- But it sure doesn’t look very efficient. It’s like knocking on the door in real estate sales or cold calling from a telephone directory as a stock broker.
- It is much more effective to apply a business development mindset: qualify leads first, and then work to get warm introductions, and finally work the sales process as you get off your list of compelling leads.
- Before meeting any possible investor, learn as much as you can about him or her: background, style, most successful bet and biggest failure. What does everyone know that could be useful in networking? Smart money investors bring much more to the table than fluid assets. They can also have immense value as you build your business influence and brand awareness.
- Follow a strategic planning process: I won’t elaborate here, since a look at “Essentials of a Fundable Startup Business” sums it up nicely. There is no need to go through a full six-month process of the kind you would apply in a large company. But you must have a clear perceptive of some major components: reference market, size and growth of the market, your unique value proposition, customer profile, competitive landscape, your product roadmap, your plan for 12, 24 and 36 months, your milestones, especially over the next 18 months.
- You should also have a rough idea of how you will earn, which includes your gross margins, your customer acquisition costs, a customer’s total value, and your operating expenses over time. Without this basic knowledge, it is nearly impossible to raise external funds from angel investors or venture capitalists.
- Develop a business plan and financial model: The results of your strategic planning process form the starting point of your business plan. The medium strategic plan envisages a quarterly financial model over the next three years. As a result, it doesn’t provide a very detailed view of expenses for the next 12 months.
- But to truly understand how your business performs at a level that allows you to describe it to a potential investor, it is essential to delve into a monthly financial plan for the first 18 months.
- You should have right product it is important. It is also important to understand the profitable aspect of the opportunities you offer to clients and investors. You need to be able to explain your money-making strategies clearly and clearly.
- Draw up a series of milestones: Milestones are another outcome of the strategic planning process. Investors need confidence in your ability to deliver.
- If you don’t recognize measurable goals, how can they trust you will execute bigger plans? Or do you even know when you got where you want to go?
- The typical process for raising venture capital in a Series A takes about six months. Gathering a seed with angelic investors isn’t much different. The best entrepreneurs set some key short-term goals to be achieved in the coming months.
- These small wins help build trust in your prospect pool donors. Each milestone should be real and relevant in terms of risk reduction. Find out what your milestones really mean and how you will track your progress against them.
- Create a story that captures the problem your company solved: When you are dealing with venture capitalists (VCs) it looks like producing a show for a short-lived theater. The same usually applies to angel investors, too, unless you find one who wants to “delve into” your technology or product and you can go out together. This can be an effective tactic for launching a highly technical product with target investors who are already rooted in your tech industry niche.
If you do all these prepalning it will be easy for you to get finance from the investor do foloow these steps before you meer any invesator .
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