It’s hard running a startup. You may have big overheads, uncertain revenue streams, and tough competition to reckon with. In these circumstances, a little seed money from an investor can go a long way.
4 Ways to Make Your Startup Attractive to Investors
But investors are busy people, and they don’t part with their money easily. If you want to benefit from their wisdom and capital input, you’re going to have to woo them in the boardroom.
So, to help you along the way, we’ve put together 4 top tips for making your startup an attractive proposition for investors.
1. Seek External Advice on Your Company’s Operations
The first mistakes startup founders often make — they think they know their companies inside-out, know where it sits in the market, and think they’re better than their competitors. Often they’re completely wrong.
Even if you think you understand your business and how well it’s doing, you might be less able to understand how investors perceive it from an outsider perspective and whether it meets industry standards in its day-to-day operations and management.
For example, operations and marketing leader Jasdeep Singh may be able to offer you advice and consulting on your company’s underlying operational structure and marketing framework to equip you with standards expected in your industry.
2. Be Aware of your Compliance Obligations
Any company that’s not on top of its compliance obligations is an immediate turn-off for investors. If you’ve had to pay a fine or been threatened with penalties, that’s a big red flag a far as investors are concerned.
Therefore, you must make sure you’re aware of all the tax, legal and regulatory obligations facing your company and the deadlines you need to meet to submit the right paperwork to the right people at the right time.
Don’t assume you’re doing O.K. just because you haven’t put a foot wrong so far. You also need to think about your business’s growth and development strategy and all the potential new regulatory hurdles you might have to jump through as a consequence.
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3. Have a Good Grip on the Data
Data is enormously important in today’s economy. Your investors want to know that you realize this from the get-go.
Make sure that every part of your company’s operations is quantified and suitably organized. It’s important to have good data on broader trends in your market, too.
Don’t think you can get it by using Excel. Get your hands on some powerful data analytics software, work out how to use it, and make your data intelligible with some effective visualization tools.
4. Know Where Your Growth Is Coming From
Ultimately, investors only want to be a part of your business when they can see the growth opportunities. So, you’ve got to make sure you give them what they want.
Your startup’s growth strategy should be dynamic, targeted, and backed up with the data. Don’t just say to investors, “We think we’ll grow 20% this year because we grew 20% last year,” — they want to see that you can seek out new areas of growth and development, not just assume your current strategy is just going to keep working unchanged.
Go Get ‘Em, Tiger
So, now you know some of the most important ways you can prepare yourselves to impress your prospective investor in the boardroom. You’re ready to go!
And remember, if you think you’ve missed something and feel under pressure, honesty is always the best policy. An investor will always prefer an honest entrepreneur who slipped up than one they can’t trust.
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