While it’s no secret that there are a lot of hungry entrepreneurs out there trying to get their hands on growth capital, there are a few simple ways you can separate yourself from the pack. Before you launch your next financing campaign, be mindful of these four steps to getting your early-stage growth company fully funded.
1. Start Months in Advance
Give yourself plenty of time to plan the campaign, create top-notch content and coordinate the launch date. The growth leading up to the campaign can be argued to be more important as the growth during the campaign itself.
2. Understand the Customer/Investor
Do your best to narrow your market down to as small as you possibly can. Envision your ideal financing partner and try to find people or organizations that fit that image. If possible, send out testers before pressing the start button on your financing campaign. Early tester feedback should be a big decider on your strategy ahead.
3. Offer a Lifetime Perk
Offer your potential backers a lifetime perk. Maybe it’s free membership for life, or a lifetime supply of a particular product. It doesn’t have to be big, but these perks can go a long way in closing deals that are otherwise sitting on the fence.
4. Focus On Your Goal
Write out and plan your entire financing campaign before you start anything else. Be organized and be ready for adjustments when necessary. Set your goals and don’t lose focus.
It doesn’t have to be difficult to get through to an investor. If your company is good, it will be seen. If your product is good, it will be tested. But as every investor knows, their decision to fork out the dough hinges on the competence and knowledge of the company owner at hand. Here are three ways to successfully raise capital for your early-stage growth company.
1. Make Sure Your Business Plans and Marketing are Solid
This is probably the most important point of all. To have a clear and concise business and marketing plan means you understand the exact nature of your business and what it’s trying to achieve. If you know this, the investor can too. Have a solid plan about your leadership dynamic and how you plan to scale it. These are crucial points that investors will sink their teeth into.
2. Know Everything About Your Industry
Know your industry with all of its nuances. Simply put, investors do not have the time or patience to put in this kind of leg work for you – the more you know, the better. If you are able to show investors that you know more than your competitors, that will surely go a long way in the decision making. It’s amazing what a little research can do. Delve into the history of your industry and look for patterns of success and failure.
3. Perfect the Pitch
Honesty is the best policy. It’s cliché, but it’s the truth in this case. Many deals have fallen through after due-diligence. When you pitch, be sure to cover the who, what, when, where, why and how. It’s an easy exercise to execute on paper, but do your best to have it flow nicely when speaking. There will be questions, so be ready. Again, know as much as you can about your competitors.
As the old adage goes, you need money to make money. It’s not any different for entrepreneurs looking for venture financing. With that in mind, take a look at these four ways to reduce your cost of venture financing.
1. Test Your Gut-Feelings Before you Launch
This is not to say don’t trust your gut, but rather confirm or deny your gut. Many entrepreneurs make the mistake of diving into the market based on a series of good feelings. Those good feelings can take you in the wrong direction and cost you a lot of money. If you do nothing but trust your instinct, you run the risk of making poor decisions, which in turns results in poor financing.
2. Adjust After Launch
You can do all the testing you want, it’s never going to fully emulate reality. Without a doubt, the best way to get true feedback is to actually launch, but with the ability to adjust where necessary.
3. Understand the Industry
Especially in emerging industries no one really knows the rules to succeed. The key is to create opportunities for you and your business to be flexible. Let it be known that the ability to improvise may be the difference between business shut-down and business success. If a formula for success is known, imitate it and improve on it. Finally in an established market, find the strengths and weaknesses of your competitors and seek out unmet needs of the marketplace.
4. Learn What you Need to Know
Most VCs prefer you, the entrepreneur, to have a team. A team insures investors that all the necessary bits of knowledge are covered internally. The obvious catch to acquiring company allies is cost — and not just salary. Perhaps those extra bodies have a handsome stake in your company. But if you are well versed in every part of your business, you have an opportunity to win the trust of investors without much cost at all.
With the onerous increase in entrepreneurial spirit, it’s never been harder to earn attention in the growth capital playground. Getting up and putting on your best smile just won’t cut it anymore. While those things are important, there are a few extras you can do to get a couple more looks in your direction. Here are four things you need to know before your next business launch.
1. Write a Press Release
Press releases are a great tool to get your message across, and what’s more it’s completely free. Put together a well-written document that encapsulates your business, service/product and culture. Don’t bore readers with the mind-numbing details about technology or design, put something short and sweet together and send it out to as many relevant publications as you can.
2. Engage the Media
Once you gather media contacts, start reaching out to them immediately. Just like a sales pitch, be ready to sell yourself and your business to the publications. Why should they cover you? What makes you special? Have good answers to these questions.
3. Don’t Forget Email
Email is incredibly effective. If done right, an email campaign can be your most effective tool for engagement and conversions. Make a plan, make templates to follow — an introductory, a follow up and a welcome email. Though it might look inefficient on the surface, sending well thought-out emails can be the difference between success and failure in the growth capital world.
4. Create Multimedia Content
Don’t just blog, make all kinds of multimedia content. Shoot videos, design flyers to hand out at networking events. Make creative slideshows, etc.. Treat blogging as a support system to a much bigger content creation initiative.
Even if you know your product/concept inside and out, there are still many potential pitfalls to speaking in front the throne of venture capital. It’s not the time to be short-sighted, it’s best to understand your product through the eyes of someone else. Here are three steps to a perfect elevator pitch.
1. Narrow Your Idea Down
As the old adage goes, less is more – and the same is true in this case. You never want to give up your whole pitch right off that bat. Find a good opening sentence and let it sink in among your audience. If they ask anything further, mission accomplished. If you are having trouble narrowing it down, ask your friends and colleagues how they would describe your product. Get an idea of what others have to say about it.
2. Ask a Question
In any presenting capacity, it’s often effective to engage your audience by asking a question. For example: “Are you familiar with Uber?” The obvious answer here is yes, and now you can follow up with something like “we want to be the Uber of parking in major cities.” It could be anything. This allows you the pitcher to get your concept across quickly and effectively, which more often than not leads to followup questions.
3. Be Calm and Listen
After your postured up and got your short and sweet message across, it’s time to listen carefully. One common pitfall is giving into the urge of rambling about the details of feature A, B and C and how they will change the marketplace forever. Before you speak, understand that if they want to hear more, the investors will ask. Only talk about your features and numbers when you are asked to do so. Beyond looking professional, doing this is a matter of respect.
It’s never been easier to start a business, and with the growing access to funding portals, it’s never been easier to raise capital. Having said that, never has there been more competition than there is today. With that in mind, we want to offer four secrets to pushing your early-stage growth company ahead of the growing and bustling crowd.
1. Crafting a Lean Business Plan
Remember those big, bulky, text-heavy business plan documents? We have happily moved on to a time when those are no longer necessary. As such, avoid having a document such as this. Investors and partners now opt to look only for a framework of your business. They will delve into the essentials of the business within the context of your product, solution in the marketplace and financials. Forget the big document, just be sure you can fill in those blanks.
2. Incorporating a Business Entity Early Through Online Services
Create a C-corporation online and do it quickly. Not only can this be done at low cost, it also saves time waiting for an outside attorney. It’s a great idea to do this before you decide to raise capital and bring on partners.
3. Establishing Your Brand Social Media
The obvious benefit here is cost – it’s nearly non-existent. Building an online image is a process and this should be started even before you develop your product. By doing this you can track early customer feedback and find where to make appropriate pivots in the marketplace (if necessary).
4. Measuring Progress With Data & Analytics
First, set your milestones and aim for them pragmatically. You don’t have to be heavily funded to get access to comprehensive data, customer analytics and metrics. Measuring early not only impresses potential investors, it’s also the first step to having a better control over your business.