RAISING CAPITAL FOR SMALL BUSINESSES
investors can get a return on the initial investment . Don ’ t forget to talk to everyone — from your parents to customers , mentors , industry analysts and more — to validate the market opportunity .
Businesses are not sure how much money they actually need . Investors do not just need to know how the money will be spent but rather how much money will be needed . When asked , responding with “ Well , I think about a million would do it ,” is not detailed enough . Not only should you know exactly how much you need , but you should also know why you need it . Why do you need more marketing guys at this point ? How much of the money will go to branding or rebranding efforts ? Production ? Training ? Hiring ? Know the answers to these questions before stepping into the boardroom .
Not only should you know exactly how much money you need , but you should also know why you need it .
Businesses are lacking qualified leaders in key positions . Depending on where a company is at the time of the fundraising efforts , it may already have a fully-functioning work force . However , like many startups and small businesses just getting their footing , it may only be a couple of people attempting to pull everything together . If that ’ s the case , get your long-term leaders in place pronto .
A competent , entrepreneurialminded team will demonstrate the passion and drive it takes to succeed to the rest of the staff , as well as potential investors . By having a trusted team around you , there are several people to see opportunities from different angles , help answer the tough questions and to provide support in the toughest moments . You cannot — and more importantly should not — go into the fundraising process alone .
Understanding Lenders & Investors First , it ’ s important to understand which type of fundraising the business is going to attempt .
Lenders loan money for a period of time and expect to be repaid with interest . They are interested in risk
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