Tips for Bringing Investors On Board

So, you’ve got a brilliant idea for a business start-up, and you’ve also done the right thing and put a business plan together, and now all you need is a bit of a cash injection to get up and running. You think the business plan should sell the project for you—and indeed, it’s a big part of your resources—but what you really need to get right within the plan is the amount of money you really need to get started.

I’ve been there and know that if you ask for too little, you run the risk of running out of cash almost as soon as you started. This makes you look pretty stupid to your investors when you have to go back and ask them for more cash. Plus, there’s the possibility that they won’t give you the additional cash injection. I’ve sourced some excellent tips that show you how to close the deal with investors and keep them onside.

Work out what money you need – then double it!

I advise you to always kick high when you’re pitching for money. Like I said earlier, it means you won’t run out and have the kind of interruptions that could hold your business launch back. Having a strong cash flow at the beginning is potentially the difference between failure and success.

Show optimism in your revenue figures, but provide evidence

It is all very well showing amazing revenue figures in the first few years of trading, but no potential investor will believe your figures if you don’t back them up with solid research data that shows why you’re sure that there’s good reason for the optimistic estimates. To be honest, investors know that

Keep control of your company

It is very important that you keep hold of a controlling stake in your company; otherwise you are nothing more than a minority shareholder. Do you know what that means? You can be pushed out of your own company by the majority shareholders. You risk the possibility of having no say in the future direction of your business. If investors demand a majority shareholding, I advise you to politely decline their investment if they insist on it. There are business structures that protect you from majority shareholders, and you should consult a legal expert in the commercial law of your country about what those company structures are.

Exude confidence

When you meet with your potential investors, show passion for your idea and confidence in it. Never go into a meeting where you’re asking for money with an air of desperation. The investors will see this as a weakness and probably won’t feel you’re a sound investment.

Have everything documented

Have your terms of business worked out and written down to show to investors. Only change those terms if it is in YOUR interest to do so. Also, be prepared to show the investors what you have put into the project in terms of commitment, especially if you have put money in. It gives them more confidence if they can see that you also have something to lose, because then you’re likely to work harder.

And those are the five key tips for bringing investors on board: you might also find this article on seed stage funding sources very useful when you’re deciding which investors to approach. And I wish you good luck with your endeavours!