editor’s note: the risk of enterprises in the start-up phase is larger, seeking external financing is relatively difficult, if not carefully prepare, the chances of success are very slim. Entrepreneurs, on the other hand, the absence of relevant experience, even if accidental success, deal structure and investment terms also is adverse to the enterprise, set a dangerous precedent for the future development. So, to succeed with external financing of venture enterprises must make preparations for financing in advance.
the author Jayson Demers for AudienceBloom founder and CEO of
you might have thought of a wonderful and exciting ideas, you might have told your friends and family, and even you may be already quit the job ready to start a business. At this time, you will want to start a company, but you have to need the money, you can’t to solve the capital funds all by themselves.
naturally, you will think of going out to raise money, in order to create some momentum for your business. The enthusiasm is admirable, but if you’re not ready to start, then you may only be a waste of time, will also feel very disappointed.
no matter from the Angle of the angel investors, or the point of view of venture capital, or the point of view of the raised platform, before raising capital, you want to make sure you’ve done the requirements on the list:
1. A complete business plan
the reason for this is the first thing on the list, because so far this is the most important. If not a business plan, you can’t have business. This will be your company to establish a foundation. Accordingly, it may contain some or all of listed below, may it does not contain content listed below, so you have to remember that. Your goal is for your business to do a general introduction, and stated it will be how to carry out profitable activities.
2. Market research
the feasibility of market research is to be able to describe your ideas and requirements of verifiable data. If there is no market research, your thoughts may only exist in theory. When access to the data that you need, you may need to pay some money, or the need to do some research, but if you want to prove your potential value, you have to have these Numbers.
3. Financial modeling
this should be a part of the business plan, but don’t underestimate adept investors the level of the required data. You need to reapply the electronic data of the table, including expected cost, mergers and acquisitions, sales and profits, and your profit space, growth and profitable time in your plan. All these will prove that your business can profit.
4 year plan, three and five years plan
don’t put special emphasis on how to start. You need to show in the first year, in the first three years and five years, you are expected to grow. Most investors want to enduring long-term business development.
to potential clients.
your market research should prove theoretical customer base, but potential customers ask you to put your ideas to make it clear. If you are interested from customers or consumers get some original customer evaluation, investors will be more interested in cooperation with you.
6. Practical ability
in the same way, you need to make sure you have the ability to personally deal with the issues of the first phase of the company’s growth and development. If you have years of experience in the industry or have other qualifications, it would be very helpful. Otherwise, you will need for training or have enough external resources.
7. Existing investments
for potential investors, if you already have some of the money that is helpful. You can stay out for all the money from, and to get some money from relatives and friends and family, that you have the financial support to investors.
usually, the brand in the development of the enterprise marketing is greater than the role of financing. However, a strong brand can help you to potential investors and shows the feasibility of the enterprise and features. To clarify this identity can be concisely, creatively explain your point of view.
9. Clear goals
before you begin to financing, you have to know exactly how much money you need, and why do you need so much money. The following two arguments have very big difference, one is “I need to give my idea to raise some money.” Is another way of saying “I need $10000 to buy equipment, $15000 for the office, $20000 for the first round of production, the last $5000 for marketing.” The latter means that you have a plan, but also can let investors clearly know where the money is.
the most important thing is, you need to ensure that investors have specific returns. For the the raise, that could mean different investment levels have sample or reward. For individual investors, that could mean expected after spending at a particular stage.
if you missed one or two, then so be it. But before financing to ensure that you meet most of the content on the list. If you can do it, you also have the right people, you should not be in the next stage to raise the funds required is out of question.
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