In this week’s capital raising segment, we want to talk about an article we found at FasterCapital. It has some good suggestions on how you can avoid the common challenges most small businesses have in raising equity.
The first step that they recommend is to make sure that you are demonstrating a scalable business model. Investors know that when they put money in, they want it to grow. They don’t want the business to just stand still or decline, of course, so you need to demonstrate to them and make it very clear that your business will increase in size and therefore increase the value of their investment.
The second factor is you need to focus in and demonstrate the uniqueness of your business or your idea. A lot of businesses are similar. Maybe you’ve got a unique location or a unique niche or whatever it is that makes your business unique. You need to emphasize that and make sure that everybody reading your pitch or hearing your pitch understands that.
You also need to have a realistic time frame. Investors are very patient people, and they tend to shy away from people that are in a hurry or need something really quick or they’re going to “lose an opportunity.” They like to sit and contemplate and think about things before they make a decision, and many times they like to find other people to invest with them.
Do not give up! That’s actually a challenge that most businesses face. Owners and entrepreneurs need to make sure they do not give up. If you give up, you absolutely won’t raise the capital, because you’ll miss all the shots you never take.
Make sure you do use your business network. Those people that know you need to know what you’re doing, and you need to make lists of your target contacts and prioritize them and go through those regularly and keep them informed regularly.
If this is something that we can help you with, we would love to do that. Just reach out to us and book some time for a call or shoot us an email. Good luck!