Every year, millions of startups and small business take a giant step on the path towards acquiring funding. The growing freelance economy has contributed to the rise of the homegrown entrepreneur, which has encouraged creativity and innovation in the business world. While it sounds great, it’s important to remember that it’s not an easy path to take.
Just 2 years ago, there were an estimated 27 million entrepreneurs alone in the United States, and if that tells you anything, it’s that there is a lot of competition out there. But that shouldn’t be taken as a sign of discouragement, but simply a reminder that while you’re building up your business, it pays to be prepared.
1.Do your research
Thanks to developments in market research, there’s no excuse to not to know your market before you start approaching investors. Even if your business plan looks airtight, investors are going to want to know that you have a foundation of facts, not just an empty house that looks good from the outside. Market research isn’t just important for instilling confidence in investors, it’s also an essential part of creating a viable business plan for the future.
Here are some of the fundamental points you should consider before you move forward with your pitch:
- Get to you know your potential consumer, inside and out
- If possible, test your product so you can get a sense of what your future customers need and expect from you. This will also help your business in the future, allowing you to adjust your customer relations, price, and services
- Get to know your competitors, consider their strengths weaknesses and assess what this will mean for your business
2.Consult an expert
Learning from those who have come before you has countless advantages. A great way to gain knowledge about how to fund your business is to work together with a consultant. A professional who specializes in procuring venture capital funds can help you work out the kinks in your business plan, while also offering you some much-needed advice.
Here are just a few of the things you can expect from a personal consultant:
- An experienced consultant has seen it all. They know what works and what doesn’t. This knowledge will steer you in the right direction, helping you avoid potential mistakes in the future
- They speak the language. You might be ready to pitch an investor, but you aren’t focusing on the right things. A consultant can help you narrow in on what investors want to see
- They can help you pick the right investor. Not everyone looking to fund a startup will necessarily want to fund yours. An experienced consultant can help you choose someone who is a good fit and with whom you can cultivate a relationship with
3.Not just all about ideas
There’s no doubt that your business should be based on a great idea. The whole point of acquiring funding is so you can bring something innovative to the world, right? Of course, your ideas need to have power behind them but don’t forget the importance of people power. Having a great team is something that investors value.
Venture capital isn’t just about getting money, but also about being open to working with new ideas, so make sure you put your best foot (feet) forward:
- Show off your complimentary skillsets. Highlighting why each member of your team has added value will let potential investors know you’ve got the chops to be, and stay, innovative
- Are you natural leaders? Not everyone on the team has to be, but investors need to see that at least one of you will take the reins and grab opportunities when they present themselves
- Investors are going to want to feel that you can work together when the going gets tough, which in the startup world, you can bet it will
One of the biggest moves that entrepreneurs and startups make in their career is taking the step towards acquiring funding. Before you start pitching to investors, make sure you’ve done your research, sought out an expert’s advice, and have a strong team behind you. These steps will not only help to bolster your knowledge and confidence, but will greatly increase your chances of attracting venture capital.
Latest posts by Dr. Diane Schleier-Keller
- Don’t Waste Time! 4 Ways Startups Are Finding Their Best Talent - February 13, 2018
- 3 Steps to Take to Attract a Venture Capitalist - March 23, 2017
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