You want money? Get Noticed!
How do you get funding to
start a business? How do you differentiate your business so as to get noticed
by investors? Investors look at a a lot deals before they find one
to fund. You need to position yourself as a hot company. To do this you to need
to show visibility in the market, create a buzz in the community and show your
business has momentum.
Visibility is about having a
presence in the market. Your ability to show that you are serving an unserved
segment of the market and with an infusion of capital you will be able to scale
operations to a point where you can be a significant enough player to generate
exponential returns. How can your business dominate a market? Do your homework
and be specific with your answer. Don’t talk in abstract terms about how you
are going to reach customers. In the “New Economy” of
1999 investors funded branding. In the current “New, New Economy” investors
fund results and the abilty to execute.
they can only get into the market after they have received funding. Not so.
There are alternatives to venture funding to get started. First is ‘FF&F”,
Friends, Family and Founder. Talk to friends and family, use your credit cards
or take out a home mortgages to get funds. This isn’t comfortable for everyone
but if you aren’t willing to put yourself on the line for your business why
should someone else?
alternative is “strategic partners / customers”. Strategic partners will often
provide funding to get you up and running so that you can provide a service
that can help their business. They will often do this for an equity stake in
your company. Strategic partners can also help you fill some of the voids that
emerging businesses have in terms of technology or management. They also can
give you presence in the market or visibility.
buzz is done through your ability to tell your company’s story and your ability
to get others to tell your story. To create a buzz you need to have a good
elevator pitch. What needs to be in an elevator pitch?
- What does your company do? Keep it focused, simple and don’t use technical jargon.
- Why is your company different?
- How are your products compelling and to which buyers?
- What has changed in the market that you will be able to serve?
- Who are you competitors and how will they be defeated?
- When and what will the payout be?
are going to have great returns. A key for creating momentum is to master
marketing. Decide what specific programs can move your company forward. Create
a validation or milestones around these events that lead to revenue and profit
generation. These milestones will drive your funding. The obvious examples are
revenue targets. For very early stage companies other events such as technology
development or customer acquisition may be appropriate milestones.
thoughts for pitching investors. First, you need to maintain focus. What is the
business, how will it make money and how much. Venture capitalists look to make
5 to 10 times their investment so you have to show them the money.
Second, you must cast a wide net. Fund raising is a
process and the odds of scoring on your first attempt are remote. It often
becomes a numbers game even for quality businesses. It is not uncommon to make
dozens of pitches before you score funding.
do a great job when you pitch your business plan. Practice, practice, practice.
Do your presentation for others and get feedback. Tape your presentation and
watch it so you can see areas for improvement.
How do you know
an entrepreneur is pitching? Their lips are moving. To be successful in
fundraising you need to be persistent and pitch your business concept at every
opportunity. There are millionaires who could fund your idea in
unlikely places. You never know who you will be next to on your next elevator
ride so be prepared and have a good story ready.