Roughly one in four businesses are unable to receive the funding they need. According to the SBA, business loans and credit cards account for about three-fourths of financing for startups. However, these methods of funding can be difficult to acquire due to business age, revenue criteria, or credit considerations. Some businesses can benefit more by securing funding from an investor. Here’s how.
1. CREATE A PLAN
It’s very important to have a plan before presenting your proposal to investors. If you don’t, they won’t take you seriously. So make sure you have a growth plan in place, which will show investors that you have a long-term, detailed plan for development. Also, you’ll need a budget to acquire your first customers. Calculate your reliable revenue and expenses for the year. Investors want to have confidence that you know what you’re going and that you have clear goals about the direction you want your company to go.
Finding the right investor for your startup is all about networking. Start by asking your family and friends if they know investors who may be interested. Then, move on to your colleagues. The more people you’re introduced to, the more you’re expanding your network, This increases the chance of you finding potential investors that might align. You can also conduct cold outreach to further expand your network.
3. DO YOUR RESEARCH
Performing background research will help you determine whether an investor is right for you. Make sure the investor has experience working with companies similar to yours. When researching investors, it’s not just about how much money they have to offer. It’s also about their knowledge and previous experience that can be beneficial to you.
4. PRACTICE YOUR PITCH
Craft an elevator pitch that provides a quick overview of your business in just a few seconds. Practice giving your pitch in front of family, friends, and colleagues. This will not only help you hone your pitch, but it’ll also help build your confidence.
Securing an investor is all about having a plan and making sure your company has what it takes to impress.