For the majority of startups and small businesses there comes a time when they start planning for the future and that often includes seeking out funding. Whether you’re in the market for an additional financial boost through crowdsourcing or planning to reach out to investors, there is plenty of preparation that goes into financial growth.
From developing an investor-ready pitch to researching and building a loyal customer base, there are several things that need to be ticked off your checklist to be sure that your business is ready for venture capital.
Chances are you have been with most of your team since day one. Acquiring venture capital funding is a great way to take on some new hires, but before you sign that check, you better make sure your core team is a well-oiled machine. This doesn’t just mean you have well defined professional roles, it also means that each member is willing to cooperate and give constructive feedback, especially in the early stages of development.
Here are some of the key traits investors expect to see from a team in which they would potentially invest:
- Excellent communication
- Diverse skill sets and backgrounds
- Openness and accessibility
- Willingness to accept constructive feedback from outside parties
Today, investors don't necessarily expect teams to follow traditional hierarchies, but they do want to see that there’s someone who can take the lead and make sure that things get done in a timely and professional manner.
2.You’ve gotten a second opinion
You and your team have done your research and you’ve got a solid outline of your pitch, now it’s time to get a second opinion. Having a second set of eyes look over you business strategy is a great way to see yourself from the perspective of potential investors, ideally from someone who has first-hand experience acquiring funding for businesses. This means you can’t just reach out to your friends and family to have a look at your business plan, but rather a professional who can help strengthen your strategy :
- Identify strong points in your business plan that you should focus on and develop
- Strengthen or remove weaknesses in your strategy
- Knows the right language to use in your pitch
- Can help you carve out a future financial forecast
If you don’t know where to start when it comes to finding an experienced consultant, the rise of the freelance economy has created space for specialists to now offer their services to businesses that are ready to start pitching to venture capitalist.
3. You’ve built a customer base
Investors understand that your business plan is still a work in progress, but that doesn’t mean you shouldn’t be prepared. Think of your pitch as complete when you hand it over to investors, but be ready to be fully flexible when it comes to feedback. Devoting time and resources to conducting in-depth market research, shows investors that you are not only serious about your business but it is a worthwhile investment for them as well.
Here are some of the ways that you can engage with your potential consumer before you start pitching:
- Identify your target market and make sure there’s plenty of room for your business to grow
- Interact with your customer through various mediums, seeing what platforms they respond to positively
- Test your product through free trials, promotions, and surveys generating feedback that will help improve your service
- Run several test campaigns and start building a loyal base through subscriptions
- Follow up with your consumers, asking for feedback and subsequently improving content
Even if you don’t have a specific investor in mind, having done your research will set you up to continually build a strong consumer base, which will serve as a valuable asset when acquiring venture capital in the future.