The truth is, there’s a lot of people like you out there looking to raise money through venture capital, angel investors and private equity. If you are wondering how to separate yourselves from the pack, take a look at these five tips to make your business more attractive.
1. Have Your Numbers Validated
Having your numbers reviewed and validated by a qualified accounting firm will greatly aid your sale and valuation. Your buyers or potential lenders will have confidence in your numbers and thus your company as well. Having your numbers confirmed (three or more years prior is recommended) will save you a lot of time and money during your quest for financial backing.
2. Eliminate Excess Cost
Showing prudent financial control and maximizing cash-flow can make a big difference to investors. But start doing this well before you seek investment — eliminate excess costs immediately. This kind of responsibility is vitally important to someone loaning you their money.
3. Have Qualified Leadership in Place
Company leadership is one of the main of most investors. If you are not going to be there all the time (and really, who can be?), the investor needs to have confidence in those who manning the front in your absence. It’s ideal if your company can grow and flourish without you there.
4. Seek Experienced Legal Counsel
Seek lawyers with experience in the field of entrepreneurial deal making. This will vastly help you conduct efficient negotiations. They will be able to help you fight over issues that matter and avoid the ones that don’t.
5. Have a Sales Team
This goes with qualified leadership. You can’t be your company’s best and/or only salesmen. If you have a department specifically dedicated to closing deals and prospecting clients, investors will be much more inclined to consider your business. If you don’t have a department, appoint a COO or a VP of Sales (perhaps within) to be your company’s second expert in sales and operations.
So you have a great business poised for growth, all you need is growth capital to get to the next level. Raising money, especially in the early stages, can seem almost impossible – in fact, we won’t sugarcoat it, it’s not easy. But with the right pitch strategy and attitude, you could set yourself up for success.
1. Choose Your Audience Wisely
It’s easy to blindly set up a bunch of meetings with a slew of venture capital firms, but often times that’s not the best strategy. Yes, there are many venture capital firms looking to deploy money into private enterprise, but pick the ones that best fit you. Maybe your company is scaling on only 10 employees; maybe your company has no employees at all. Either scenario is fine – the key is finding investors that are looking for companies just like yours.
2. Tell a Story
When you meet with your potential investor, give them a taste of your ambition. Your enthusiasm is always a plus. The last thing you want to do is give a mouthful of numbers. Do you want to take over the world? That’s fine, just make sure you echo that desire with a plan. Tailor your pitch like an outline to a novel. Take the potential investor through your past and into your planned future.
3. Keep It Simple
It’s easy to assume you are making a pitch to industry savvy investors that will have no problem understanding your business model. But remember, you’re the expert in the room. You’re the one who has (most likely) spent years in the industry and surely there is terminology or lingo you are accustomed to. Never assume the person across from you understands the nuances of your industry. Develop a pitch a kid living down the street could understand. A good pitch will present a solution to a need that everyone can understand.
We were extremely fortunate and thankful to have attended the 2016 US / Canadian State Dinner After Party. The After Party was held at the top of The W Hotel which overlooks the White House, Capitol Hill, and Lincoln Memorial, among other American Landmarks. The event was hosted by the Canadian American Business Council (CABC) which is an organization focused on private sector issues that affect both Canada and the United States.
There were 250 people in attendance at the State Dinner After Party which enabled our leadership to meet a number of very interesting and exciting, past and present, politicians and business leaders. Not surprisingly, the atmosphere at the After Party was extremely electric and energizing, and went on into the early hours.
One of the by-products of the 2016 State Dinner, which was certainly echoed by the After Party’s atmosphere, is that Canada and the US are now closer than ever. Obama and Trudeau have a renewed commitment to work together on key environmental issues, more effective energy policies, more efficient border security, and on building cleaner and more innovative economies. And while there were more than enough secret service agents on site, Obama and Trudeau unfortunately did not attend the After Party, which given all they had accomplished during the day is certainly understandable.
What is more interesting though is that these types of bi-national events are bringing about a real change in the way Canadians and Americans view each other. During the trip to Washington DC, we encountered and spoke with many Americans who were eager to learn about the new Trudeau Government, its Policies, and Justin Trudeau himself. There is a notable difference with how Americans are viewing Canadians and our new government. It really does seem that Justin Trudeau and his government have captured much of the american political audience in a very positive and inspiring way.
Our leadership came away from attending the 2016 US/Canadian State Dinner After Party with a very strong sense of Canada and its values, and we as an organization are very proud of Canada and excited for its future.
Do you want to attract investors? Why don’t you put yourself in the cheque-holder’s shoes? What would you like to see in a company before signing your cheque? Here’s a list of five things investors will look for before putting up their dollar.
1. Good Financial Performance
This one is kind of a no-brainer. Know your numbers better than you know the colour of your shoes. Investors are going to look for evidence of financial stability. They will ask if your company has signs of growth and how you plan to initiate that growth. It’s also a great idea to know your debt repayment plan. Knowing how to take care of your debt is perhaps the most important piece of wisdom you can carry.
2. Background in the Industry
Chances are if someone is willing to sign a cheque, they won’t have patience for mistakes or a learning curve. Investors are going to look for someone with a track record and/or proven success. Venture capitalists in particular are going to look for someone they can trust with their money. With that, it’s a good idea to convey your passion and knowledge of the industry.
3. Company or Product Uniqueness
What distinguishes you from the competition? Your company needs to offer something unique, and you will need to convey that with clear evidence. Venture capitalists will highlight things such as patents and other proprietary features.
4. An Effective Business Model
A company doesn’t really display its strategic value until it starts generating a profit. As such, investors will look for a business model that can prove company growth. Venture capitalists and angel investors will be cognizant of both market and financial conditions and will be looking for those acknowledgments.
5. A Large Market Size
Investors typically want to invest in solutions that address problems in large target markets. The larger the customer base, the better – providing that customer base is stable. Investors typically look for companies that can grow quickly and manage a high-growth scale.