4 Tips to help you maximise your time with Potential Investors
Capital is absolutely essential to the success of a business. Every business will at one time or the other get the opportunity to present its business to potential investors – people with the financial power your business so desperately needs. Now make no mistakes, gaining the attention of investors is hard work. The rule of thumb for investors is that for every 100 investments they make, only 10 will go big. That means investors are likely to be interested in resourcing about 10% or less of 1,000 business proposals out of a hundred thousand business opportunities. In this article, we will explain what you need to stand out and grab the attention of your potential collaborators – The Investor.
Know thy business
As an entrepreneur, imagine you’re asked a question about your business during a presentation and the next thing you could say is em, hem, em, ….and then you’re short of words. Oops! This kind of scenario could be understood as incompetence or lack of confidence, which isn't good for any business! You should be able to answer questions regarding your start-up reasonably well. It is your business you are presenting, and there should be nothing about your business that you are confused or uncertain about. Investors want to be sure you are really READY for the long haul. In fact it’s advisable to create your business plan with potential investors in mind.
Spot the right investor
Approaching the right investor is an investment itself. According to grasshoppers, there are three major types of investors; the first group are the ones who want to invest solely to earn a return (profit) which is the reason why they are usually over-involved and may pressure you for all the wrong reasons; the second group are those that have already generated significant wealth and have no real need for more money. They’re probably at the stage in life where they feel compelled to give back to the community, and part of that can be through their investments; the third are the ones who are passionate about specific industry, they are hoping to serve as true angels and really come through for businesses in their area of interest by offering both funding and insight – without necessarily having wealth acquisition as their ultimate goal. Find out as much as you can about your prospective investor(s) and ensure you’re going all out to get the attention of the right one.
Prepare a clear and well-grounded pitch
Sometimes you get 10 minutes (or less in some cases) to pitch your business idea to investors, so it’s best to keep it short. It majorly entails approaching investor(s) with a clear description of your product, problem(s) you are solving and why your product would gain more grounds than the competition. Present an honest and convincing picture of how far your business has progressed and what you’ve already achieved.
Develop a sustainable business structure
Successful entrepreneurs design – at least some of – their business structure right before they get started. Developing an organizational structure involves defining the framework through which your business will operate. By defining how the organization works, you’d be more effective in choosing leaders and making effective decisions. A clearly outlined strategy, management structure, rules of operation, distribution of work and the room for overtime changes shows investors you’re in control as every member has clear guidelines on how to contribute and what they are likely to get in return.
Would you like to share your experience or knowledge on how to attract business investors? Hit the comment button.