How Startups can Maximize their Financing Rounds
.. Like everything involved in running a small business, maximizing your funding efforts is possible. Just blindly looking for investors may work, but it would be the exception, rather the norm. Here are a few things you can do to maximize the effectiveness of your fundraising campaigns.
1. Work the numbers.
Emotions and passion is not important. Investors want to see someone who will commit to the project, not someone who will throw away their money at the first sign of trouble. However, that’s not what you get as capital. Numbers will get you capital.
Investors want to know how much money you’re making each month, and how much money you stand to gain in the future. They also want to know how many customers you have and how much return business you get. Don’t try to fudge the numbers. Not only is it dishonest, but getting found out can damage your name enough to ruin the entire round.
2. Show Them Your Plans
What you’ve accomplished thus far will help immensely when looking for additional funding. Unfortunately, that’s not enough. Investors don’t just want to know what you’ve done. They want to know what your small business is going to do next. What you’ve done is a proof of concept. Your plans are what potentially will make money for them. Investors want to know how quickly you can breech the $100M barrier, and so you’re open to getting more business and public trading. It is never too early to think that far ahead in the future.
3. Look Around
Getting the right investors is more than looking for the people with open wallets. You want th right kind of investors and the ones who share your vision for what the company should be. If it is not the right fit, walk away. Better to spend more time looking for the right people than to get tied down to people with conflicting ideas.
4. Find Out What They Want?
Different Investors want different things. Some are happy to help and are more investing in you than a company, while others are ones who simply want a profit. Even those who want the same thing, can always have different measures of success. Ask investors who do start up business loans if they want out of the company. Some will want a minimum annual revenue before they put money down the table, while others will be focused on how the company feels and its current growth rate. Knowing what constitutes success can help you present the most relevant information and lock down and investor suited for your startup business.
5. Close Things Out
A lot of small startups and business get tripped up and ruined over tiny little details. Missing paper work, for example can put your financial standing at risk. Failing to properly declare your fund raising campaign can put you in terrible legal woes. Check if your lawyer and your accountant can make sure everything is in order. Fund raising campaigns are stressful, but they are not also exciting. Each time you do it, it represents a milestone in your small business life. Just make sure to do it right.