There are many reasons for wanting to raise capital, whether it’s to get your new business started, or to boost it to the next level. However before you raise capital, there’s many important factors that need to be considered. Here’s an example of 3 questions that you should ask yourself when looking to raise capital:
How much capital do I need?
The first step in realizing the amount of capital that you need is to create a complete and comprehensive business plan. A business plan forces you to think about your business critically, and identifies and quantifies the capital that is likely to be required for your business to operate at each stage of growth. If you properly project your business’ currently and future needs, you’ll have a more realistic (and more accurate) picture on the amount of capital you will require.
How do I raise capital?
The source of capital really depends what you’re trying to achieve through this capital raise. For example, the most common source of capital for start-ups is the business owner her/himself in the form of home equity loans, credit card advances, loans from family, etc. However lets assume you’re looking to raise capital to get your business to the next level. At this point, business owners typically seek out capital from private investors such as investment banks, accredited investors, and venture capital funds. They will typically propose an investment stylized in the form of debt, equity, or a combination of both. The types of capital you choose to go with really depends on your businesses financial needs.
Who might be interested in investing in my business?
Typically the amount of financing you need determines the types of investors that would be interested in investing in your business. If, for example, you need a $100,000 loan to purchase a delivery vehicle for your bakery, a bank would likely be more than willing to lend you the money. However as the amount of funding needed increases, you’ll be required to engage a more sophisticated investor that’s seeking a larger return and assuming greater risk – someone who’s looking to get a little skin in the game. Common investor types that would be interested in a larger, riskier financing would be Venture Capitalists, Angel Investors, Institutional Marketplaces, or Crowdfunding Sites/Platforms.
Having brand presence the single greatest ways for your business to gain wide-spread recognition and promote company growth. In this day and age, most companies are utilizing a number of social media platforms in order to broadcast their brand to prospective clients. Ensure that you’re creating fresh, new, and engaging content that will separate you from your competitors. Here’s three great ways for you create an online brand presence to help grow your company:
Optimize Your Website:
Having a well working and engaging website is one of the most important branding tools for any business. However in order to benefit from your amazing website, you need to be driving traffic towards it. A great way to do this is to use keywords that your desired customers would be searching for in your content, which is one of the first things companies do to increase their brand’s visibility and drive traffic to their site.
Post Engaging Content:
Ensuring that you’re creating quality content is a no brainer in gaining visibility online, and it really helps give you an edge against your competitors. Make sure that you are posting fresh new content and keep it original. Nothing deters brand presence more than stale, boring, and infrequently posted content.
Consistency is Key:
You need to effectively communicate what your business is really about, and what you can offer people as a good or service. It’s imperative that you’re being consistent with the content that you’re sharing. Consistency helps reinforce your brand and really imparts on people what your business is all about.
If you have a small business that’s strapped for cash and looking for an infusion of capital, you may want to consider using angel investors. This type of investor offers a great way to generate some funds that can kick-start your business to the next level. Before you go down this financing route, you’ll want to familiarize yourself with this type of investor.
What is an angel investor?
An angel investor is a wealthy individual – often doctors, lawyers, or seasoned entrepreneurs – who is willing to invest in a company in its earlier stages in exchange for an ownership stake. They need to be registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, with an annual income of at least $200,000 and a net worth of at least $1 million. An angel will give you money in exchange for equity in your company.
Would an angel invest in my business?
Angels are only typically looking for businesses with the potential for exponential growth. If your business has no plans to expand or enter new markets, an angel will not be interested in investing in your company; they are interested in realizing a large gain by investing in the early stages of businesses and cashing out when the company goes public.
Should I engage an angel investor?
Whether you decide to engage in the help of an angel investor really depends on your personal management style and your long-term plans for your business. Unlike a bank loan or debt financing, equity capital gives someone else ownership in your company. While you may welcome their money and expertise, you need to ask yourself if you’re willing to give them an ownership share and potentially having them making decisions for your company.