Securing investors and raising capital for your business
Obtaining funding can be the difference between making your idea a success, or it never getting off the ground. There are more sources of funding out there now than ever before, however, competition for investment is fierce so you in order to have any chance of securing the funds you need you will need to sell a compelling plan and vision for the future.
Your first step is to identify your target investment source. This could take the form of a traditional bank loan, funding from a venture capitalist, or a private equity investor. The route you choose to go down will depend on what you need the money for, how long you need it for, and whether you would prefer to pay the loan back or instead give up a portion of your business in return for the investment.
Regardless of your funding requirements, you should be prepared to demonstrate why you represent a sound investment opportunity. For this you will need to create, and subsequently present, a comprehensive, well-researched and ultimately realistic business plan. You will be expected to explain the how your idea begin, your reasoning behind wanting to pursue it, details of the investment you need, and the results you envisage achieving should the investment be forthcoming.
You will also need to have prepared an exit plan. Any investor will want to know when they can expect to see a return on their outlay and how this process will be managed. An investor will typically take their investment, and hopefully their returns, upon their exit from the business; it is vital that you bear this in mind when preparing your proposal.
You also need to give careful consideration to exactly what type of investment you are looking for. While for some entrepreneurs, financial input is all that they are looking for; for others, however, it is the experience and expertise an investor can provide which is just as valuable. You need to know what level of input you require before you start looking for an investor. A lot of this will depend on your own experience and the sector you are involved with.
Certain investors will be content to simply provide funding and take a back seat when it comes to the day-to-day running of the business. So long as they see a return on their investment, they will have no interest in overseeing the day-to-day operations of the business, or guiding it in a certain way. Other investors, however, will only provide funding on the condition that they can take an active part in the business they are investing in and have a say in key strategic decisions
There are positives and negatives to both types of investment, and knowing which one will work for you is vital. Knowing exactly what sort of investment you require means you are not wasting time approaching investors who cannot offer you what you want, and it also ensures both parties are fully aware of what is expected of each other before entering into any deal.
If you are confused about the myriad of funding options out there, or would like to know more about how to maximise your chances of securing that all-important investment, the experts at Selling My Business can help.
Our experienced team has overseen the acquisition and disposal of hundreds of companies over the past four decades and built up an unrivalled network of financiers and investors. To discover how we can help, contact our team today.