Raising funding for your company can prove to be an uphill task if it has started operating recently. It is because lenders, angel investors, or venture capitalists are more comfortable investing in a company with at least a year or two of operating history. This has intercepted many new ventures from raising sufficient capital to survive. As a result, they close down in a matter of days or months.
So, what can a start-up do? The first step to acquiring the required finance is by preparing a business plan. To learn how to compose a formidable business plan, read up on our article Composing a Business Plan.
To attract funding, you can follow these five guidelines:
1. Go after the right source of funding
There are various forms of funding available. These include bank loans, angel investors, credit cards, Crowdfunding, and venture capitalist. It is essential to pursue each of these sources at the correct time.
There is a criterion for every source of funding. You have to pursue a capital source for which you meet the criteria. Else you will fail.
For instance, if you are looking for investment after three or more years of operations, bank loans can be a suitable source. On the contrary, if you aim to raise capital at the launch of a business, venture capital can be a viable option. However, it might take a toll on you to convince a venture capitalist that the idea can yield positive returns. Also, it has the potential to be scaled upwards in the coming years.
2. Don’t get disheartened by rejections
Regardless of how great your idea, product, or service is, many investors will still choose against investing in it. Even Google was denied funding by many at the start because they were dubious of its survival.
You have to be willing to present your idea to several investors without expecting each one of them to praise and, simultaneously, fund it. A business needs just one acceptance to be able to operate. Therefore, you may be just an investor away to get along on the road to success.
3. It will take some time
Crafting a majestic business plan, building technology to prove the concept behind it, and convincing investors to fund through pitch decks can take up years to materialize. An entrepreneur must practice perseverance and wait for his time to come. The key is to keep going.
4. Be consistent and clear
Business is synonymous with problem-solving. You start a venture when you think you have cracked a successful business idea. This idea is a solution to an existing problem or a random thought that may have struck a chord. Therefore, your business must revolve around that more significant cause. You must present a problem- with a promise to offer its solution at the same time- to portray that the idea revolves around a purpose.
Moreover, the actual product or service should meet the promise you have pledged above. Even your marketing and sales strategies must be coherent with the purpose. To excite the investors, you have to be consistent and clear in the value you propose.
5. You will eventually get money
It may not look comfortable, but most businesses can find funding. As an entrepreneur, you must have thick skin to face a series of rejections. But, there is light at the end of the tunnel for the ones who stay patient. You must choose the right kind of funding at the right time and be clear when articulating what business stands for.
If you can follow the above-laid guidelines, you will find investment one day or the other. We, at Oak Business Consultant, are specialized in providing consultation on these matters. We have helped a number of companies in building a robust financial model and business plan along with Pitch Deck. Therefore, you can visit our website Oak Business Consultant to consult with us for free before reaching out to the investors.