Before seeking funds, ask yourself these

  • by Adeyinka Adekeye
  • 4 Years ago
  • 0

1. Does your business solve a problem?

Investors don’t want cute gadgets or wacky inventions – unless those things actually solve a real problem for a significant number of consumers. The same goes for services. At the very heart of what investors are looking for is whether your business idea meets a current demand among consumers, or will create a demand because it solves a problem consumers never even knew they had.

2. Do you have customers?

“How can I have customers if I haven’t even started my business yet?” Wrong answer. The best way to demonstrate you’re solving a problem with your idea is to go out and find people who have that problem and believe your prototype will fix it for them. This is part of the hard yards. Go out and find the evidence. Not your family and friends, but actual people who are independent and neutral but think what you want to do is the greatest thing since Uber or sliced bread. This is the pool of customers investors want as proof you have an idea that can go to market.

3. Does your team have the right set of skills?

Don’t have a team? Get one. Investors are far more likely to put money in if they see your business idea is being lovingly nurtured and grown by a team of capable people with complementary skills. The classic startup team starts with a duo: usually a practical, tech-minded person and a finance-savvy salesperson.

4. Is your idea scalable?

There is no excuse anymore for Australian businesses not to look globally. The capacity to go global provided by the internet and digital means your idea should be looking for international markets. The fact is Australia is a rich nation but it still has a relatively small population. You can get started here, but investors will want to see a business model that is capable of being replicated and scaled in overseas markets.

5. Are you after a loan or actual investment?

There is a lot more involved in securing capital from investors than there is in taking out a loan from the bank. Think about what it is you want out of the investment. Seed and angel funding investors will expect a bigger say in how you run and shape your business and they might take a bigger cut than a bank. Think about the merits of bootstrapping until you are really ready to take your business to the venture capital arena.

6.Do you have all neccessary data organized?

Investors like numbers and data. More impressive than the slickest video or PowerPoint presentation is a solid set of numbers and data that shows how your business model works and who your potential customers are. This is what you can build your compelling story on. Otherwise you’re dealing in fairytales.

7. your networks?

Hit the meet and greet networking events that are part of the startup scenes in your capital city. Follow and comment on the social media posts of people in your industry and especially investors. Online and social media means you now have access to some of the most powerful people in business right at your fingertips. Don’t abuse that privilege, but think about ways you can make it work for you.

8. Are you willing to back yourself?

If you’re not going to back yourself, you can be sure few others will. This extends to putting your own skin in the game. Investors appreciate the show of faith that comes from a business owner who is willing to put up some collateral to make things happen. This might mean doing something scary like remortgaging your home, but if you truly believe in your idea, this might be what you have to do. If you’re not willing to take that step, you might have to think hard about your idea and go back to the drawing board.

9. what will you do with the money?

You need to have a solid, concrete reason you’re going to people asking for investment. Investors don’t want to see their money squandered. What they want is a plan to outlines what money is being put to and for what purpose. As I’ve already mentioned, investors will ask you probing questions and will give you penetrating feedback, much of it around how money is to be spent. You need to have the answers and be accountable because once you receive seed funding, you have to justify your outlays and outcomes.

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