You’ve taken the plunge and started your own business. Now you can see what it can really grow into, but you are short on funds, and you’ve already exhausted what you borrowed from your parents and friends. Where else can you turn?
Well, you might consider angel investors; successful entrepreneurs sometimes look for ways to invest in growing companies with potential and great ideas. Be aware, though, that many investors have certain things they look for in a startup that can trigger them to invest. Knowing some of these and preparing your pitch for them can mean the difference in getting funding and walking away with nothing.
Be very specific about your products, marketing strategy and pricing, and emphasize again how your market is anxiously awaiting your arrival and your products will be a benefit to the masses and, in return, create profits. This is the part the investor is most interested in. Also, let investors know that as you become successful, there are other interesting things you think you can do with your platform that aren’t in the numbers you’ve shared and that could actually be a lot bigger than what you’ve been detailing. This can often get them thinking of additional ideas for you and they will start to feel included in your venture.
If you’re seeking large sums of investment capital, most investors will want to know what your exit strategy is. Are you planning on getting acquired, if not, how will you retire or leave the business when it’s time? Show you’ve done some due diligence on this, and why it would make sense 5, or 10 years down the road.
Your story should address the problem you’re solving in the marketplace and the benefit to the masses in a subtle way but still include the investors’ expertise and draw his attention. Make sure the investors are on the same wavelength as you are. It’s important that they are involved in the same industry as you are.
One last suggestion: Many investors groups, and companies, meet on Monday mornings to discuss potential deals and vote on investments. If you pitch on a Monday, you’ll be waiting a whole week to hear back on whether they’re interested in learning more. By then, they’ll have listened to other pitches and may not hold the same level of interest they did earlier. Try your best to schedule your pitch for the middle of the week so your ideas and company will stay fresh in their minds next Monday morning.
Learn more about what investors are looking for in our Wise Learning Series Resources.