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The hardest part of a business is in the early growth stages. Money is spent on everything; new equipment, location to operate in, new business software, and investing in stocks among other things. This is why angel investors are vital at this stage and here is how you attract them.
Investor funding has played a big part in today’s business world. A lot of the start-ups you see in the Silicon Valley or the London Stock Exchange are able to make these bold steps because of private funding. However, what about that business that is just starting out but doesn’t have a steady income flow. How do you attract a business angel and persuade them to believe in your idea or brand?
What Investors Look For In Start-Ups
If there is one thing you always need to remember about private funders is that they are always thinking profit. They don’t have time to invest in a brand or idea that isn’t value for money to them. Thus you need to toughen up and be as convincing as possible.
The best way to do this is to think the way investors do. They will need to know how their money is going to be used which means you need a business proposal ready. Your proposal should briefly highlight what your start-up is about and underline your financial positions in the past, present and what you aim for the future. If you are just pitching an idea, you need to outline, clearly, how the money will be allocated and how profits will be achieved, especially for the investors.
Secondly, it’s not always a good idea to go to the investors empty handed, unless your pitching skills can convince an audience in less than 5 minutes. Business angels want to see that you are coming from somewhere financially for them to put their trust in you. They could decide to put 50% on the table and expect you to match up with the other half. This not only earns you respect from the investors but it also bars any possibility of the angle exploiting you; how many times have you heard the phrase ‘I want 50% of your business’ on Shark Tank?
Thirdly, investors are looking for entrepreneurs with great people skills to work with. You don’t need the charisma of Obama, just learn to talk politely and in a convincing voice. Make sure the investor feels you know what you are talking about and they feel engaged and persuaded during the whole pitching process.
It all boils down to whether you can answer these two questions that loom in the angel investor’s mind; why should I invest in you? And what makes you stand out from the rest?
Do you always need an investor?
We cannot ignore the other possibility that you can do everything correctly but still not land that funding deal you wanted. This does not mean the end of your business, it means you need to find ways of starting small.
Cost is the biggest challenge of a business but luckily there are ways to overcome that in our tech savvy world. Start social media pages that advertise your brand, product or services to the masses. Web sites, like Facebook, provide you free analytics of your user traffic; who visits your website the most and at what time. You can also target a specific group of people with your brand for easy conversion of leads.
Be careful not to spend your profits at the beginning stages, best invest in stocks or binary options. You can open an online trading account (again it’s free) with websites like CMC markets where you can invest your profits. This way your money grows and before you know it, you do not need that investor after all.
It doesn’t matter whether you get funding or not, the important thing here is to start. Start small, start where you are and always aim to minimise cost. When your brand finally grows bigger and everyone is talking about it, you will be surprised at how quick investors will rush to be part of your growing business. Success will always attract the right people towards you.
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