Seeking investment is a big step for any startup or small business, and it can often feel unnatural to entrepreneurs. Still, for most, it’s a necessary step that will not only fund the next phase of the business but propel its growth over the next several months or years. Being able to attract potential investors, though, can be tricky – regardless of how good you perceive your offering to be in the market.
Investors want to know a lot about your business to date, how it performs now, and what you plan for the future, writes the Harvard Business Review, so you need to have all of those details set in stone before any meetings. Prior to that, you can adjust certain methods and areas of your business to become more attractive to potential investors. Here are some of the ways that you can do that.
Make the launch fast from a small start
If your startup centres around a new product, Startup Donut says that it’s best not to wait until it’s perfect, as startup values revolve around what you practice rather than the potential in theory. By starting small, you get to concentrate on one or two aspects, refine them as you go, and have the time to take on feedback to improve your offering in ways that appeal to your real customers.
Creating this smaller, devout, and engaged customer base can do you a lot of good when investors come looking, and the idea of a fast start tends to appeal. For example, ImIn, Inc. closed $1 million in seed funding just six months after its founding in 2022.
Keep your financials perfect and get them audited or reviewed
One of the main sore spots for investors can be financial documentation. Small businesses and startups have a way of cracking on with the business and customer-facing side at the expense of filing proper and legible finances.
Having everything in order appeals greatly to investors, as they’ll want to peruse your books, and having a professional audit or review the figures, as highlighted by Inc., helps a lot.
Focus on selling to customers through any available avenue
For the health of your startup, if you’re selling products and services, focus on it to generate capital and get to grips with the market. The simple act of trying to sell stuff helps you to develop your niche and even discover new ones.
Plus, you can benefit from selling anywhere. Candlemakers Scentsy, TechCrunch says, were selling at car-boot sales and the like before exploding into the mainstream and being able to pump out ads.
Getting into funding
Even once you become attractive to investors, you need to get funding ready, which is another leap entirely. On the legal side, SeedLegals can provide guidance on how to raise via the different methods available, as well as ensure that all of the legal documentation needed to grow your business is automated for you. This includes getting SEIS/EIS Advance Assurance, protecting your IP, and hooking you up to a cap table management tool.
They also provide further tips on getting ready as a founder. These steps include figuring out how much you need to raise – as going in with a figure that’s unrealistic or too large can sink your efforts – getting the right essential legal documents in order, and preparing your pitch strategy. On that last point, you need to make sure that your pitch has the exact pieces of information that investors want to hear and little else.
Once you’ve made the moves to attempt to make your business more appealing to investors, you’ll then need to turn to make the funding process as seamless as possible.