11 Top tips for getting Investment

OK you have something, it’s going to change the world, or make people’s lives easier, and it will help business people find leads or have something for that burning question everyone has.

You have spent the last 10,000 hours testing and getting this ready for the world to see, sadly though; now you are skint, flat broke, yet you know you can use O.P.M. (Other people’s money) find an investor and Robert’s your Mum’s Brother.

BUT finding an investor is not as easy as posting something on Facebook and waiting for them to beat down your door, if only! You have to learn a new skill called courting investors as another loop to jump through, as if you have not jumped through enough already!

So here are our tips to getting the right purse strings on your team!

Investors rarely look at one man bands:

If it’s your business and there is no one else involved, think about finding a partner quickly, because Investors hardly ever invest in a single founder. Get a Financial Officer even if it’s just on paper, it’s just the Investors mindset, and they are trained to look at teams. If you need to get in front of them in the first instance; then a team of at least two makes it easier.

Business solitaire?

Your Team:

Experienced Investors are good to find, because they have all round knowledge of business and start-ups, their insights into launching business should be invaluable to you, well it will if you have done as much research on them as they have on you, and you know they have a good list of companies in their portfolio they have taken public or sold at profit.

It feels weird at first like; who’s interviewing who here? They all offer money, but an Investor that has good experience as well as startup capital for you, will be worth double just someone with money on its own

They have a good idea what makes a good CFO, if you have good programmers, if your marketing people have a good idea about where your business is heading, and what you all want to achieve. They will want to meet the whole team. Investors will be particularly interested in how you have picked these guys, which will tell the investor a lot about your leadership skills

Harmony:

Investors get jittery if you are on your fifth CEO and 3 rd. CFO. If you had to meet somewhere secret because of bad blood, it just shows you are not gregarious, which is a massive prerequisite for running a business.

Biz-find teamwork

Location, Location, Location:

Steve Jobs almost lost his first round of Investment for Apple as he was working from his family’s garage. It took a lot of convincing that Jobs’ dream was bigger than from where he launched.

Getting Investment is a little like selling a house; you have to create the right environment that sways decisions, you may not think you have to get the coffee on and smile but you may be surprised. Where you pick to work from tells people a lot about how important the idea is to you.

If your business model needs footfall then being hard to find is not going to help your case. If you are selling fishing rods, then being miles away from a lake or any fishing clubs, isn’t going to demonstrate much acumen either.

No way out:

You may feel you have the best business idea in the world with your Mouse waistcoats, but it’s important to show you know how to expand to other peripheral markets, like expanding your waistcoats to fit other rodents, how many pet shops there are in your area, and further afield and how to get your product to other markets.

Investors always think from the negative and ask a lot of negative questions like;

What if your first idea fails?

What’s plan ‘B’?

Where can you go from here?

Is your insurance up to date?

You may even wonder if they believe in you at all sometimes!

The future:

Google is not going to be the Google we know now in 5 years, what is future proof about your business? Investors need to know if you are married to your hobby, and if you are blind or too attached to see the simple things that need to be changed, or if you are willing to let go of something that you love and have invested time in because the overall impression is that it’s not going to work.

A staple question for Investors is; how fast can your business adapt to a fast paced and ever changing market?

Failure to launch:

If you have found a million of excuses why you have not got your hands dirty and started up yet, then this sets alarm bells of in the investment fraternity.

Microsoft (Heard of them?) have had hundreds of launches of each new system of Windows, meaning they were never ever ready.

Launching and failing teaches you a lot about the market you are in, and getting your toes wet will give you massive experience in what works and what doesn’t. Pride has no place for startups, if you are upset when an Investor says: It’s a great idea we will have to completely start again though with a new team, then best go and get a safe monthly pay check.

Conversely being overzealous and launching a lollipop without the stick, won’t endear your startup skills much either.

The people lending you money want to know you have thought about how to handle your growth all the way from seed to IPO.

Target Market:

The more you know about your customer, how old, where they are , how much they spend, when they spend, what peripherals they buy, and that you know your competitors versus your unique selling points etc. etc. the better the chance of getting your money. If you can draw a really accurate picture of who is your customer, how many there are, and what they are worth to your business, then you will start to get the financial interest you deserve.

Targeting

Asking for too little:

In the time I spent with an Investor visiting wannabe companies, the one thing that was constant is people ask for too little. More often than not, they ask for half of what they require, which is a little concerting for the investor, sure he knows you are new at this, but if you are not even going to give yourself a decent wage then how are you going to have the energy to come to work each day with a positive bounce, not to mention your family?

Being in the right ball park with your capital needs to go global and not run out of cash flow in the first year raises your chances of getting your mullah. Conversely being way over the odds and asking for too much makes you come across greedy and untrustworthy.

“Mr. Jones do you really think you can pull the combine harvester with a new Lamborghini you said you need in your business plan?”

Seed capital

Staying user friendly:

Sure, you shiver with excitement when you start talking money, but if it comes down to it users will always be important as your cash flow, and more often you should say no to Investment if it means losing users. Users pay you all the time, Investors just want to pay once and get their skin later, try to see users as family.

Ground floor:

Investors love to see a startup team leader who has good knowledge of all aspects of his business and gets his hands dirty whenever needs must. That kind of commitment assures them of your determination to make a success of it all.

Cash cows also feel that if you have too many other projects running to see which eggs in the basket are the least to break, or you are hedging, does not demonstrate the commitment and consistency needed to make one project work.

Netmedia are UK registered small business mentors and also Thailand’s leading social media marketing trainers, who also run Biz-find, let’s have a chat about investment and perhaps we could put you in touch with the right people.