Raising funds for a starting company is not an easy task. Forward-thinking entrepreneurs start preparing themselves for this moment long before they actually need (or are ready) to start raising money. They know what it takes to build a company that is irresistible to the investors. Here we will boil down the most important steps and practical ways to follow if you want to make your startup irresistible to investors, to win their attention and keep their interest longer.
The fear of missing out
The famous FOMO is widely discussed topic. Even though it applies mostly to people, who are addicted to checking social media constantly in order not to miss something “important” out and to stay on top of the trends, the fear of missing out can be implemented as a strategy by entrepreneurs, who are trying to impress potential investors. Scarcity is very powerful in business, especially in the investment business. Make it clear that your business is unique, that your investment round is time limited and that you have other people interested in investing in your company (only if you do!), and you will make the investors more interested and engaged in the process.
Preparation as a symbol of professionalism
Know how much money you need, why do you need this amount and how you are going to spend it all. Entrepreneurs seek investment for different reasons – in some cases it is to hire better team to develop the product, in other cases it is to be able to get enough inventory to meet the demand. Having a plan is extremely important for investors – they will feel much more comfortable, knowing that their money will be well spent.
Highlight the potential
Have practical and detailed growth plan and well-defined exit strategy ready when you start serious negotiation with investors. The investors are highly interested in the exit strategies that entrepreneurs have for their businesses, but are also paying attention on the growth potential of a company. Craft your growth strategy with detail, back it up with data and try to keep it simple, not complicated, realistic and believable.
Think as an investor
If you want to craft the most successful investor pitch, to be confident and prepared for the meeting with the investors, you should be ready to not only nail your presentation, but also to handle the Q&A session flawlessly. In order to be prepared for the questions of the investors, you should think five steps ahead – like a very skilled chess player. Adopt the investor mindset and be ready to answer the questions of huge importance, related with market share, traction, strategy and so on.
Improve
The best way to impress investors is to… well, actually have a very impressive business. Aim high and work hard towards building the company that will be irresistible to investors and it will eventually be in the center of the spot light. Becoming the next “big thing” is a result of a lot of hard work, devotion, confidence and growth. Work on improving your numbers before you meet with the investors – don’t pitch to the investors vague possibilities, give them real numbers, real value and they will be interested. Build first, then sell! Create value and your business will not be overlooked.
