- Work on your credit. Yeah, most people want to glaze right over this one, but it is very important. If you’re meeting an investor, they don’t know you from Jane, what do they have to go off of other than your credit and a tiiiiight business plan? Get it started, get your report, clear up any old items, make arrangements with past due items under 2 years old, and start working on it. The hardest part is starting.
- Ok, so while you’re working on your credit, you may want to consider other options for gaining funding. Crowdfunding! We’ve seen some great success stories with people, projects and businesses using www.kickstarter.com and www.indiegogo.com. These 2 websites are DEFINITELY worth you checking out and can possibly get you the money you need.
- Is your idea viable? Will people really pay for your product or service? Do you have examples of times that they did? Is your idea/product/service already out there? If so, what would make people come you and buy yours instead? These are important questions to answer BEFORE asking for funding from an outside source.
- Is there a way that you could bootstrap your company for a while first while you gain customers BEFORE asking for funding? If so, this is definitely a good choice. This helps you to learn:
- If the idea is viable
- What price people are willing to pay
- What is the best marketing strategy that is cost effective AND brings in business
5. Did you know there are different types of investors who invest in specific companies? Have a technology based company, service oriented business or products? Make sure you are approaching the right type of investor or the investor who is looking to put money in YOUR type of business to increase your chances of gaining the capital you need.
6. Have you done extensive research into your industry AND what the specific investors wants to see? Don’t go to a meeting half prepared- you may only get one chance. Make sure you:
- Know your company backwards and forwards.
- Have a well thought out strategy.
- Have an exit strategy.
- Be able to explain completely how you will pay them back ( this is one of the biggest reasons people DON’T get funded)
7. Are you ready to have another person, a relationship, a partner with a say in your business? Most don’t take this into consideration when asking for investment dollars. If you are willing to have someone else’s opinion weigh in heavily with what the company does, what new products and services you will carry, the future direction of the business, then proceed……..
8. Do you have a team in place? Are you approaching an investor planning to explain that you will handle every position in your business and that you will do it successfully? Most investors like to see that you have previous experience in the type of business you are starting or transferable and relatable skills AND that you have others in place to handle the areas that you are not strong in. Eg. Marketing, Accounting, Operations, IT, etc. etc.
9. How much skin do you have in the game? Only come to an investor when you know how much you are willing to invest yourself. This is extremely important. Most investors want to see that you have skin in the game, that you are serious and won’t bail as soon as trouble come. You MUST be willing to invest some of your own money into your business.
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