Advice number 5? Be transparent
The global economy, despite being volatile at times, has created an environment in which anyone who has the ability to conceive a product or service can launch a business.
With the rapid expansion and advancement in the world of technology, it is possible for an aspiring entrepreneur to conceive a low-cost product that is, at least, minimally viable, and launch it on a small budget.
However, there will likely come a point in which the business will require substantial capital in order to facilitate growth. With traditional funding modalities, such as small business loans, becoming more difficult to obtain, many entrepreneurs will look to turn to private investors, such as angel funders or venture capitalists.
Here are five steps that an entrepreneur can take to make that startup more investor friendly.
Make it easy to understand your growth plan and growth projections
It is important for the entrepreneur to develop the start up in a way that will be appealing to investors — making it easy to assess projections, marketing reports and overall viability.
According to Charles Costa of SitePoint, one of the essential elements that should be in place when seeking funding from the private sector is that the entrepreneur be looking to take their project to the next level.
Growth is a vital element of consideration for investment because it must be clear how the money will help expand the reach, growth and revenue generation of the company.
Consult private investors while preparing your proposals
Consulting an investor in order to gain a better understanding of what the average investor will be looking for when considering investing in a startup is wise.
In an article for Entrepreneur George Deeb of Red Rocket Ventures explains the importance of understanding Market, Model, Management and Momentum. A private investor can enlighten a founder on how his or her business fits into these cornerpoles for success.
There is no one better to provide insight on investors than one of their own. By working within the industry, it is likely the entrepreneur can increase the chances of securing private funding.
Develop an online business profile that is visible
The rapid expanse of the internet has made it the number resource for individuals seeking information.
Investors, or their support team, is practically guaranteed to conduct a search on the entrepreneur and the startup. This is why it will be important to develop an online profile that will be easily searchable.
One way to make a profile searchable is by using unique terminology and titles. This list by Forbes is a nice starting point to infuse the website with jargon that may make it easier to pinpoint the startup community.
The fewer attributes that can be considered common to the startup profile, the more likely it will show up on the first page of an organic search. While the ranking and page position has appeal, it is simply good to make the site as easy to find as possible.
Create a network presence with AngelList
Sometimes, the simplest approach is the best route to take.
Name recognition and familiarity still carry a great deal of weight, even when it comes to the process of securing private funding for a startup.
As Bloomberg points out, by developing a presence or profile with AngelList, it is possible to build a certain level of familiarity within these networks.
Placing the name and the brand in front of potential investors long before seeking funding can create a sense of familiarity. Hopefully by the time a Founder seeks a Seed round, the community will already be aware of what the startup does and its market and industry viability.
Additionally, creating and maintaining a presence in this type of network can also increase the chance that the entrepreneur will be approached by an investor who is looking to invest in similar type of business.
Public facts about the startup
The more transparent the entrepreneur and startup can be about the project, the better.
Releasing opaque information or spouting platitudes makes it difficult for investors to formulate an opinion of what the company is capable of accomplishing.
When information is published, via blogs, forums and social media, provides valuable insights to use to formulate and accurate picture of the company. This information can lead to a follow-up so the investor can gain direct insight into the direction the entrepreneur is looking to take the company.
What is important to understand is that presentation and personal branding is huge. It is more likely that a private investor will be willing to work with an exceptional entrepreneur with a sub-par idea that a poor entrepreneur with an outstanding idea.
So, how the entrepreneur is perceived can be just as important as the business itself.
Michael Rogers is the Operations Director of USInsuranceAgents.com. With over 5 years of experience and knowledge in the insurance industry, Michael contributes his level of expertise as a leader and an agent to educate and secure coverage for thousands of clients.
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