Here at Match Capital, we rank investors and investor platforms in order of those most likely to invest in your business. But that’s not the only way we help entrepreneurs secure the funding they need to get their ideas off the ground. So, we’ve decided to share some of our top tips with you…
Experience and previous successes
Few qualities are as marketable as the experience and success of your team. In many cases, investing decisions are made on the strength of the people and not the opportunity. While an incredible idea might be a success despite the people, the right people can transform even a mediocre idea into a rip-roaring success.
Often it’s not what you say, but how you say it. Your pitch will be a better guide of your confidence and ability to think on your feet than any amount of trumpet blowing. However, relevant experience is crucial to inspiring investor confidence. Has your team been highly successful in the past? Do you have specific industry experience? Make sure you tell prospective investors all about it.
All too often an investment is not secured because of a failure to identify and define the potential market. A product or service should solve a particular problem. Market research is essential for determining the size of the potential market and the scope of the problem. Investors want to know:
• What need the product or service will solve?
• How you know the need exists?
• How the product will fulfil these needs?
• What is the size of the potential market?
Growth to date
If your startup is already up and running, accurate figures that detail your growth to date are essential. If your growth hasn’t been as meteoric as you might have hoped, don’t be tempted to oversell, overstate or embellish the figures. Investors are smart people. If your business has potential, they’ll be able to spot it. Instead, be as transparent, honest and straight-forward as possible.
The amount of funding required
To assess your startup as a potential investment, interested parties will want to know exactly how much money you need. Trust is a big subject for investors, and by asking for a sensible sum for a fair percentage of the business, investors will appreciate the legitimacy of your proposal.
After drawing up your business plan, calculate precisely how much funding you need and include all the costs of your project. Consider salaries, administration costs and any other hidden expenses involved. Investors love sticklers for detail, so show them what a stickler you can be.
How will you spend the investment?
Will you spend the investment on a one-off piece of equipment, a marketing campaign, increased production or additional skills? How you earmark the funding will give investors a good idea of your business brain. Have you understood what is holding the business back? Can you see where the opportunities lie? Again, make sure you have calculated all your costs before approaching investors. After all, you don’t want to sacrifice more of your business for money you don’t really need.
Have you experienced success raising money for startups in the past? Do you have any tips of your own? We’d love to hear from you, so please leave your thoughts in the comments section below.