September 22, 2010
Probably one of the most daunting initiatives in the process of starting a business is finding the necessary capital. You may have an excellent innovative idea and an unflagging commitment to launching the enterprise, what you also need to prove to potential investors is that your future business is capable of generating revenues in a timely manner. Some of the missteps that could make entrepreneurs stumble in their search for funds, especially in the case of business novices, can be avoided if the following key aspects are considered.
Write a Detailed Business Plan
Your business plan is the map that is going to guide you through the complex business process. Therefore, it needs to be carefully detailed and constantly updated, in order to lead you on your way to success, which means, first of all, reaching a cash flow-positive status. When the business plan is ready, you also need to prepare an executive summary, with a cogent business description that demonstrates your execution skills and the company’s chances of securing high return on investment.
Contact Only Suitable Investors
When you decide to send a teaser email to potential angel investors or venture capital firms you should first make a sensible selection of those that are most likely to fund your business. Consider their location, stage and sector preference, the minimum and maximum amount they invest, a proven track record of success with other companies in their portfolio. These investors will have an in-depth understanding of your business and will be able to provide you with management assistance, expertise and useful contacts.
Prepare for the Pitch
A face-to-face meeting with business investors requires a lot of time for preparation and speech rehearsals. Attention should be paid to both content and form. Be clear and concise, make sure the listeners understand what your business is about in the very first minutes and avoid unnecessary details. Use PowerPoint slides to make the presentation more attractive, but speak only referring to them, instead of reading the content. Maintain eye-contact and adapt your body language and tone of your voice to match the situation and make you sound natural.