What Investors Are Looking For
You’re ready to ask for the capital you need. For your best chance to get it, keep these five tips in mind before you present your proposal. You’ll impress your investors with professionalism and a solid plan.
- Know Your Market. Whether you provide a product or service, you are filling a void in the market. Share that information, concisely, in your proposal. And be sure to address these points:
- Size of the market. Know your potential for sales, and when they’ll be made. Investors want to know when to expect principle and profit, as well as how much. Remember, it’s always about them.
- Market saturation. Emphasize what’s unique and special about your product or service. If you’ve got a revolutionary new process or product, be sure its ACTUALLY revolutionary. If all you’re really doing is competing on price, but pushing the same old thing, no amount of clever buzzwords is going to hide that fact from an investor.
- Know your competition. How many others are doing what you are or something similar? Know your strengths and weaknesses and address them. Show how you’ll put up barriers to entry into the market. Let investors know you understand the market and your competitors, and how you intend to overcome obstacles.
- Know Your Financial Picture. Understand key financial documents to speak intelligently with potential investors. Understand your fixed and variable costs.
- Balance sheet. Know your assets, liabilities, and what’s already invested in the business. Have solid financial ratios. Seek funding before trouble sets is.
- Profit & Loss. Explain U
- m /annual fluctuations in your bottom line. Knowccmom what an investor’s ROI will be and when it will pay off. No one will invest in a business that doesn’t demonstrate competency in analyzing profits and losses.
- Cash Flow. Know when and how much cash comes in and goes out at any time. If you’re projecting, keep it real, based on facts. Let investors know how the projections were developed.
- Build Trust. Anyone who’s investing in your company is investing in you. You have got to make sure that you earned their trust.
- Be ethical and legal in all you do. Don’t take shortcuts.
- Lead your team by providing clear direction and rewarding work well done to keep good people.
- Have a well-defined communication plan to keep your team, management, customers, vendors and potential investors aware of what’s happening in your company.
- Good Presentation. Let investors see you as the professional you are. Dress appropriately for meetings. Speak with passion and confidence about your company and products. Have confidence in yourself, and others will, too.
- Solid Business Strategy. Show that you’re in this for the long haul and have both a long term strategy and short term business goals. Make sure you’re invested in your business with time, ideas, and money. And others will want to invest, too.
Follow these guidelines. Showing investors that you’re prepared and professional will go a long way towards getting the funding you need to move your business forward.