We all are excited about our ideas and that is very essential for a startup but when it comes to raising capital, it definitely requires more than just your enthusiasm. Searching for an investor is not easy especially when there are high chances that your idea might get turned down. Looking to raise funds is the entrepreneur’s version of taking a job interview where you need to say the right things at the right time.
While there are different kinds of investors for whom you will need to customize your pitch, there are certain things that are bound to impress potential investors that will take your business to the next level. So what does it really take to impress someone so much that they are ready to give you their money? Here I have 5 questions which if you can answer well then I can assure you that you would have left your mark.
Do you know your Business Plan well?
If you cannot put forth your business plan in brief then you have just lost the interest of your potential investors. Very few entrepreneurs have a clear business plan and you need to ensure the investors that you are well aware of all the aspects of it. A clear and concise explanation of what your company does, who is your target market and how you are different than your competitors will grab the investors’ attention. If you can display that you have worked out solutions for all kinds of problems that may arise during the project then you have certainly increased your chances of approval.
Here’s Your Free Audible: How to Break Into Venture Capital And Think Like an Investor
Are you good with your Numbers?
You may probably not be very good with numbers but there is no way getting around with that as every potential investor will want to know the worth of your company and what will they earn in return. You will need to demonstrate promising margins, profit scale and growth potential of your firm. Even though investors may believe in your idea, they invest to earn money and so it is important to tell them what they want to hear and make them believe that it is achievable with your business.
Here’s Your Free Audible: Be Smarter Than Your Lawyer and Venture Capitalist
Who do you have on your team?
Investors don’t just look for a selling business but they also want to know the team behind it. While they surely care about the business they invest in, they care more about the founder of the team with whom they would be entrusting their money. No investor wants to finance an idea which the team cannot execute. So even if the investors are not so sure about your business model or your industry but you have a strong and talented team then they might just be ready to invest in your business.
Here’s Your Free Audible: Startup Funding — Taming the Lions of Venture Capital
How are you different from your Competitors?
Your idea may not be the first of its kind in the market which definitely makes it less risky for investors, but you also must make them believe how your product is better than that of your competitors. Sure enough, you can’t highlight all the good factors, but you should ensure that your product has the differentiating factor that appeals to your customers and that in turn will grab the interest of your investors.
How well do you connect with your Customers?
Investors are interested to know how you engage with the customer and that there is a potential consumer market. This would basically tell them your methods of selling and building the bond with the customers that will result in repeat sales. Everything that you can exhibit about the positive relationship with your customers, from the consumer behaviour that you have learnt to the channels that you employ will help in getting the investors on board.
So as you work hard towards running your business, appealing to the potential investors is the next level in this game. If you can think like an investor and be well prepared with your pitch, then no one can stop you from backing that funding.
As always, let me know your thoughts on the topic. I’d love to hear your ideas and views in the comments below.
Also, if you would like to read more captivating stuff on the topics of entrepreneurship, marketing, social media, leadership, technology, innovation and venture capital via my regular posts then please click ‘Follow’ and feel free to connect via SlideShare, Twitter, Facebook and LinkedIn.