Fund raising is on the wish list of every entrepreneur. With a maturing ecosystem, the capital supply is increasing; which in turn means that there are more opportunities for new entrepreneurs to get funds to set up or expand their start-up. So here the top points to remember while taking the plunge and for staying ahead in the game. If you are setting up a start-up in the region, then it will be at least an average of 5 to 10 years before you would think of exiting or closing your venture. And be it your first time or not, there are some factors that remain the same.
1. Concentrate on sustainable growth and prove the numbers
Which business set up doesn’t want to undergo exponential growth? However, there are hitches and pitfalls too, as we are noticing with Uber, WeWork, and many others – and due to this, the investors these days are vary of this. It is recommended to prepare a growth roadmap for at least 5-10 years, and have clear and well-defined goals and objectives for gauging your enterprise’s success.
Having said that, your business model should reflect accurate and convincing growth prospects, and your pitch should accurately display what steps you are planning to undertake for meeting your business goals. Ensure that they’re SMART goals, so that you can show growth year-on-year in terms of your anticipations and objectives.
2. Have clarity in your expecting from your investors and communicate that clearly
As an entrepreneur, you should first have an idea that you believe in, or have in-depth knowledge about. But there are many entrepreneurs who are open to taking ideas that investors want to give them. It is always better to have a clear idea but at the same time, be open to the advice of investors. If they think that a particular client would not be good, then ask why and handle the situation in a delicate manner, instead of pushing it further.
3. Confine your research to existing partners and their earlier deals
You could have a list of your priority investors as a starting point. As a next step, you should know about the earlier deals or investments made by them, and where their interest lies, where they were before, and if any of them is on their way out. This kind of information would help you in focusing your energies to target the right people at the right time.
Though, all the information is not easily available, you can collect some data from your network in the system.Therefore, it is very important to expand your network and remain in good terms with people around you.
4. The primary focus should be your relationship with the investor and not on his investment in your venture
Always remember that all the investors won’t say yes to you. Gracefully accept refusals, if any, so that while listening to their opinion, you can put your connection with them above the investment they are offering. This will help you earn respect from them and also keep your doors open for future prospects.
5. Respect the timelines and don’t lose your focus
Investors can be intimidating at times. But you should remember to design a strong business plan and have a strong mind. Maintain your confidence and don’t go under just because you want their investments. So first, you should get your business model perfect. This way, you’ll grow even without new investments, may be not that quickly though. While negotiating, stay in a position of power, but not in arrogance. And ensure to stick to your deadlines and communicate openly and professionally.