You have a really good idea for a new business; you have the passion to back it up, now all you’re missing in an investor. You’re convinced that investors should be jumping at the opportunity to become part of your company, but they’re not.
Shrad Rao had this same problem when he wanted to launch Wagepoint, an online payroll software service for small businesses. This week we attended the Toronto Enterpreneurs Event in Ontario, Canada, where Shrad shared how from many cycles of trial and error, Wagepoint finally got the investments they needed. He put together a short checklist to make your small business attractive to investors:
Keep it simple. List the most important points of your product and avoid listing extra features.
“If your product sounds like it does this AND this AND this, you have too many features”
Present a clean, crisp product.
Make sure you have the right mix of skills on your team. You don’t need lots of people involved; you just need the right people.
Never compromise on who you bring on your team. Avoid “help” from people who don’t share your passion, or who come with a negative vibe.
Does your product fit a need? Do people want what you’re selling?
“Customer Validation proves that you have found a set of customers and a market that react positively to the product: By relieving those customers of some of their money.”
– Steve Blank.
Know your business metrics such as; MRR (Monthly Recurring Revenue), CAC (Customer Acquisition Costs), LTV (Lifetime Customer Value), etc. Investors want to know that you’ve done your homework and have come prepared.
Have a plan of where you’ll spend investments and how many conversions you expect per channel. It doesn’t need to be perfectly accurate, but they want to see that you are prepared for what comes next after funding.
Some investors will be specially interested in funding during the Growth Stage.
Some other helpful tips to keep in mind:
- Some investors are better than others; seek the ones who have a background in entrepreneurship as they will also be able to act as a mentor.
- The best way to find investors to approach is by introduction. Find other small companies who were funded, or even those who weren’t but are already have connections, and get them to introduce you to investors.
Was this helpful? Do you have your own checklist? Leave a comment and let us know!
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