You’ve finally found that investor interested in helping your company raise growth capital. Now you need to get the exact deals and terms that you’re looking for. Strong negotiation skills are needed in every business venture and it is important to be able to compromise on the terms so that both parties are happy with the deal. Negotiation skills are acquired through time and practice. Here are five tips that will help you get started.
1. Give and Take
Make sure you know how to compromise. Both sides need to have certain needs met.
2. Be Willing to Walk Away
Go with your gut. Sometimes the deal will not go through – and that’s okay. If it’s meant to be, it’ll happen, and sometimes you may need to go through multiple deals in order to get what you need and want.
3. Don’t Rush
Don’t ever rush when trying to complete a business deal. By rushing you may miss important details in contracts, or you may miss out on a better deal. That being said, sometimes waiting too long isn’t helpful either. Make sure to find the right balance.
4. Do Your Homework
Do all the research you possibly can on the investor(s) that are interested in your opportunity. Going into a business venture completely blind is never a good idea. Doing the proper research will eliminated future problems.
Make sure to listen to the other party. This is especially important in making sure that the deal you come to terms with is fair for both sides.
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.
You’re an early-stage growth company and it’s time to raise some capital. While it has never been easier to get your business out to the investing masses, the competition never been more intense. Before you set out on your fundraising journey, take a look at these six tips to successful crowdfunding.
1. Video is Crucial but it Isn’t Everything
Make no mistake, your video demo is the most important part to your crowdfunding campaign, but also be aware that it’s not a good idea to poor all your resources into the demo alone. Set a budget for your demo and stay within it.
2. Put More Focus on Story, Not Quality
Sure it looks nice to a polished demo on screen, but good cinematography won’t win investors over alone. Focus on a good story and really sell yourself. In this business looking are not necessarily everything.
3. Pass the ‘Mom’ Test
If Mom won’t buy it, chances are outside investors won’t either. Furthermore, it’s a good idea to go into a crowdfunding campaign with some backing to lean on – even if it is just from friends and family. Do your best to put some money in the bank early.
Encourage everyone to share your content online in exchange for a discount or a free product or service.
5. Set Achievable Goals
Set reasonable goals that you can quickly reach – it establishes credibility early on and provides momentum. Set a target you can reach within 24 hours if possible.
6. Mobilize your Targets
Before launching your campaign, it’s a good idea to get together an extensive email directory together. Most money you acquire is going to come from investors who hear about you via email.