5 tips to securing investment for your startup
2 Minute Read
Had a groundbreaking idea, but lacking the funds to get it off the ground? This is a struggle that so many entrepreneurs face on a daily basis. Steve Tucker, CEO of Bunting, faced similar struggles himself, but since then, Bunting has secured funding from some of the best investors in Silicon Valley. So here are his top tips for securing investment.
1. Know your numbers
We have all seen those toe curling episodes of Dragons Den. Amazing product, smashed the pitch, Dragon asks for financial details, and it all falls apart. Make sure you know your cash flow, gross profit, net profit and predicted growth. Slipping up at this hurdle is a sure fire way to lose the interest of your potential investor.
2. Be realistic with your figures
Entrepreneurs are passionate and determined to make their business a success. However, that doesn’t necessarily mean your company is worth as much as you think. Be sensible with your numbers, you may value your skills much higher than investors.
3. First impressions count
Studies show that typically, major decisions on one another are made within the first 7 seconds. Think about it, in less than 10 seconds, months of planning could go out of the window, so make sure your first impression is spot on. Don’t be late, think about your posture, make eye contact, be confident, consider your appearance. According to the Harvard Study of Communications, it takes a further 7 meetings to change that first impression. The chance of you getting 7 further meetings with your potential investor if the first didn’t go well? Slim to no chance!
4. Define your ideal investor
Research is key here. There is no sense in spending time pitching to investors for your clothing company, when their passion is IT. Know the investors you’re pitching to, know their background, their previous business ventures, what they’re currently working on. Do your homework, it will be worth it!
5. Don’t give away too much too soon
Whilst gaining investment for your startup to get it off the ground is exactly what you need, giving away too much equity too soon causes many startups to lose their vision and control. Investors have excellent negotiating skills, and they invest in companies to make their money back and more. Set yourself a limited of what you are prepared to give away and stick to it.
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