Are You Investor Ready?
If you are in the midst of launching your own business or if you are currently in business, you are likely wondering if your enterprise is investor-ready. “Investor readiness” hinges on a variety of factors. Simply preparing a strategic business plan and financials is not an indication that your business is ready to take on an outside investment. Even if you are eager for an outside investment, there is no guarantee that anyone will be interested in your venture. Plenty of preparation and hard work is necessary to put your enterprise in a position that interests outsiders. This process is commonly referred to as “investor readiness.” Click here to view Investor Ready Checklist.
Types of Investment
As capitalism has progressed, the variety of funding options has blossomed. Today, business investment takes place in all sorts of forms from new age crowd funding to angel investors, venture capital and traditional bank loans. The challenge lies in securing the necessary funding. It is quite often the entrepreneur’s lack of investor readiness which prevents them from securing investment funds they so desperately needs.
Common Errors When Seeking Business Funding
Put yourself in the position of a venture capitalist or general business investor. Such an individual is constantly bombarded with requests for investments. Though venture capitalists might genuinely be interested in helping to launch or improve enterprises, the truth is that it is often too premature for such an investment. The average business has a variety of weaknesses and structural problems that an investor does not want to be involved in fixing. In some instances, the investor does not have the necessary capital to address such problems either. Entrepreneurs seeking investment capital should ensure that there is a certain polish to their presentation in terms of both content and aesthetics. They should put themselves in the investor’s shoes and consider how the pitch sounds from their perspective and whether the requested amount of funds is appropriate for your business’s current state and goals.
Steps to Take
Begin by assessing your business plan and your projected financial goals. It is prudent to engage the assistance of a funding expert to determine if your investment request is appropriate for the stage that your business is at. The funding expert will analyze your company’s financials and provide appropriate advice. He will also help you figure out the proper type of funding for your business and determine the best way to approach potential investors.
Figure out the type of investment that is ideal for your company as there are different types of funding. Some forms might be appropriate for your business while others are not. It is imperative that you pinpoint the funding types that are appropriate for your company’s objectives. This way, you can determine if an investor’s objectives are aligned with your own. Determine which forms of funding are appropriate for your long term goals as well. For some entrepreneurs, giving up equity will hamper the business in the short-term and/or the long-term. It is therefore important to determine what type of impact a new investor will make on your ability to lead and steer the company. Consider whether ceding a portion of control is really worth the money.
Target the Right Type of Investor
Be as objective as you can when attempting to determine which investors are ideal for your business. Perhaps your business is not suited for an investment from a venture capitalist. Maybe an angel investor or crowd funding is a more appropriate option. In general, venture capitalists are not the best investor target for local businesses. However, plenty of crowd funding participants are interested in funding small businesses. Do your homework before soliciting funds from these groups and you’ll boost the odds of finding an interested investor.
Maximpact experts are here to help you simplify the process to become investor ready. You can visit us on the web at www.Maximpactservices.com. Maximpact has 135 business development products and services designed to help your business evolve and meet its full potential. Our mentors and business experts will steer you in the right direction and jump-start your investor readiness. Visit www.maximpact.com now to find solutions you need for success.
Helpful Resource and Tool: Maximpact Investor Read Check List