When it comes to the process of raising financing & investors, there are several key areas to cover in order to ensure your success. One of the most important keys to success is having a strong business plan. Having a business plan will help you and your potential funding partners see where your company is going, what it is going to offer to customers, and what you plan to do to stay competitive in the marketplace. In short, if you don’t have a clear road map for how you plan to go about business, you run the risk of being effectively shut out by more experienced companies that have clearly defined funding strategies.
The next key element to securing investment capital is to have strong leadership. If you have strong and experienced leadership, you can likely count on steady funding from venture capitalists, angel investors, and/or private investors. Having a track record of success is essential for convincing investors that your business has the potential to be a large cash flow machine that creates strong annual profits. It also helps to demonstrate to investors that their money will be well spent. After all, who better to invest money in than someone who has already shown they are invested in the future of your business?
The third key to securing financing is to work with a good team of advisers. A strong team of advisers and associates can make the difference between investors choosing your company over others that have similar business models. These advisers can provide you with both seed capital and venture capital, which is the term used for raised funds that is not earmarked for repayment. They can also help you secure access to small business loans as well.
Finally, you need to be prepared to negotiate effectively. Negotiation is the key to securing capital, and it is essential to your success. As you progress through the capital process, your ability to negotiate will increase as well as your chances for obtaining a higher funding round. The more capital you can secure the more likely your business will be able to grow into a profitable venture.
As you work with the finance department of your business, you will want to focus on building a strong relationship with your finance people. This will be critical to you later when you approach private equity or angel investors for capital. You should build a positive working relationship with your finance experts so that you can have the confidence to pitch your business to these investors as early as the capital round is being developed. Your relationship will be critical to you later when you are seeking either financing or angel investors.
Building the relationship with your finance group will be important. As you progress through the capital rounds, you will be able to tap into additional resources as well as have a better understanding of when you may need to raise additional capital. If you aren’t doing as well as you would like during these crucial funding rounds, it is important to re-examine why you aren’t receiving as much interest as you would like. Perhaps there are questions with your business model that could be solved with additional funding. By doing this analysis in advance, you will be able to better focus on attracting the investors that will be necessary to help grow your business.