The last global recession wasn’t kind to many businesses just starting out, but with the economy taking baby steps towards recovery, investment is certainly back on the agenda for those looking to grow their company from a fledgling startup to a massive success. But with 28 million small businesses (in the US alone), getting your startup noticed by a potential investor can be a little tricky.
So, put these four tips into practice to transform your startup into an investor’s dream:
Focus on scalability.
Investors are interested in businesses that have a great potential for growth. Therefore, making sure your business idea is scalable is the first and most important step towards securing early stage funding.
To accomplish this, base your venture and business model on plenty of market research to reassure investors you have gone above and beyond in your search for scalability. Include realistic forecasts built on measurable data to ensure your business is more than just a great idea.
Scalable businesses tend to have minimal overheads and large profit margins, and give investors and venture capital firms the guarantee they need when it comes to gaining an attractive return on investment. In essence, no growth means no investment; so show investors you are in business for the long haul.
Clearly demonstrate your USP.
Developing your unique selling point (USP) as a company and demonstrating how your USP and service or product caters to a gap in the market is also a must for those seeking investment. Remember your venture should aim to resolve a real issue, and whether your potential investors are aware of its existence is up to you! Investors don’t want to fund startups that face stiff competition in a crowded marketplace. Instead they need you to fill a void that others have overlooked.
Present something tangible
In most circumstances, investors aren’t willing to part with their hard-earned cash on a whim. Seasoned investors want a tangible product or service backed up with facts and figures that are relevant to your respective target market.
Be prepared with a real product or service that people can touch and see, as your time will only be wasted if you search for investment funds with a concept or a product in development. Even if your product is far from perfect, the potential for further development will be there for all to see.
Meanwhile, always test your product first to ensure your proposal is backed up with realistic projections and feedback from real customers (i.e., customer validation). If your business idea is market-ready, then gather written endorsements from customers, advisors and industry experts to highlight the journey of your startup to-date.
Be polished and professional.
Presenting a united front as a startup with a finely tuned professional image and ethos will confidently demonstrate to potential investors that you mean business. Combine your vision with a well-researched and iron-clad business and revenue plan to showcase all the credentials of an investable business on the route to success.
In the same breath, whilst it is important to be the complete package, never present the ‘finished product’. Investors want businesses that are malleable and on the cusp of continuous innovation, so always be willing to improve, even if you think your venture is perfect.
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