Our introduction to raising capital will prepare you with who is a potential investor, how you can position yourself to best represent your company, how you can position your employees to represent your company and how you can position your company as a whole to gain investment. If you expect to stand a chance to get funded, you have to prove that you are flexible, responsive and detailed in every part of your business. Investors are strictly looking for as sure of a bet as possible.
If you have never raised capital before and/or doing a brand new start-up, you should look for alternate ways to get your business going, establish a track record and a proven model before looking for capital. You should be able to show a model where you can successfully perform a simple profitable transaction that can successfully be duplicated over and over. Funding should be going to building upon a base of proven sales.
If you have a proven sales model and can demonstrate this, your are going to be far more successful to negotiate and secure funding. If you do not consider yourself a good salesperson, then you should quickly focus on finding the best salesperson that you can partner with and let them pitch your product and business. This is absolutely imparitive to your success.
Be prepared for the time to fund to take considerably longer, the investors to ask many more questions than ever before and the terms to be less than satisfactory to your current investors, but the good news is that solid plans and entrepreneurs are still getting funded. The process can take as much as 18 months to complete funding with the time frame usually falling in the 6-12 month range.
Investors are going to ask you for key information and analyze what you know and how you present yourself so spending more time upfront with documentation and research will help you to shorten the total time it takes you to raise capital. Far to many times entrepreneurs and small business owners will seek capital prematurely and with some effort the result can be substantially different.
The many ways that you can raise capital for your business include but are not limited to:
- Business Plan Competitions
- Factoring Receivables
- Loans
- Leasing
- Private Placement Offerings (Equity)
- Initial Public Offerings (Equity)
Whatever way you choose to raise capital, you need to be prepared to demonstrate your ability to perform according to your agreements, show that you have the knowledge, experience and desire to succeed in the business.
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