March 10, 2017
Today, acquiring funding for startups and entrepreneurs is easier than ever. The digital age has made it so anyone with a big idea can get his or her name out there, whether it’s through social media or through crowdsourcing. In addition to an increase of available resources for small businesses, the promotion of flexibility and creativity so ubiquitous in startup culture has caught the interest of big-name investors. Yet, availability doesn’t necessarily mean simplicity. In the startup world, there are plenty of inspiring success stories, but you can be sure that those who have made a name for themselves didn’t just get there overnight.
When it comes to attracting a venture capitalist, there is a lot to consider. Beyond whether or not your product looks good on the outside, you need to want to make sure you’re ready to show off your business plan, all-star team and leaderships skills.
1. Don’t be afraid to ask for advice
While in the process of preparing your business plan, or carving out a pitch for a potential investor, don’t be afraid to ask for advice. Consultants that specialize in acquiring funding from venture capitalists have worked with countless companies looking to do the same thing you are. Their experience alone could make it worth investing in one.
In addition to being familiar with what venture capitalists are looking for specifically, a skilled consultant will also have the knowledge to translate into valuable advice when it comes to structuring your business plan. Subsequently, they can also help you identify what types of investors to reach out to and how. Overall, investors appreciate if you’ve put in the effort to work with more veteran players because it shows you are taking your project seriously.
2. Take the Lead
For many startups, the added intimacy of working in an often flat-hierarchical team is a positive thing when it comes to building company trust and comfortably exchanging ideas. Yet, it’s important to sharpen your leadership skills, especially when it comes time to put your hat in the ring. You future funding will greatly depend on how you take control, from your team to the conversation.
Bolstering your leadership skills will give investors the sense that you are prepared to go through ups and downs and take the reins when needed. While many investors prefer to work closely with their team, they need to know that it is you that has things under control first and foremost.
3. Find your customer base
One thing is for certain, you are probably not going to receive funding if you can’t show that people are interested in your product. In fact, having already built your potential customer base should be just as important to you as it is to an investor.
There are a few ways of building up a customer base before you start planning your pitch. First, do your research. Make sure you understand your target market inside and see if there really is a space for your product on the market to fit, but to thrive. You can then generate some useful data through product testing, by offering free trials, encouraging reviews and engaging with your audience through promotions and followups.
4. Bring the whole team
Maybe you’re lucky enough to have that one person in your team who is really great at public speaking and takes care of all of your PR. While that’s great for dealing with the press and creating valuable content, when you approach investors, it’s a good idea to bring the whole team along with you.
An experienced venture capitalist is going to have seen a lot of teams come and go through their office door, so they most likely know what they’re looking for. One of those things is teamwork. The more we understand the importance of creating a varied and diverse team of colleges, the more valuable varied skillsets and backgrounds have become. Companies that nurture diverse skillsets are always attractive to investors.
Charles Dearing is a veteran tech and marketing journalist with more than 15 years of experience using words to move people to act. He has written for various publications such as ProBlogger, Big Think, Apps World, to name a few.