By Marc Peskett
Bringing investors into your start-up will be one of the most important decisions you will make about your company.
Raising money through angel investors, private equity or venture capital can fast-track your start up for growth and scale. But by taking this leap, you always have to give something up. Which means you will more than likely feel like you are losing control of your company. But if you have big dreams of growth, funding is necessary to get to the next stages.
So how do you prepare your start-up to showcase to investors? Here are nine tips that will get you on your way.
1. Have your books and financials in order
Make sure you have partnered with a great accounting firm that has proven experience in growing start-ups and investment. This will help you set up your company right from the start. Most important, the buyer and potential lenders will have confidence if your numbers are in order.
2. Eliminate excess costs
This may seem a little odd, but you need to reduce your costs in order to bring on outside funding. By showing you have a good grasp on the numbers, spending wisely and paying attention to maximising cash flow is very important.
It is best to give yourself a plan over a year to organise your company before you start approaching outside funding. Once you have decided to approach investors, you should eliminate any unnecessary costs straight away. Do not make this a gradual change; the longer history you have for stringent costs in your business, the better-placed you will be for a higher evaluation.
3. Get your story straight!
When you are sourcing funding you have to tell your story over and over again. Get that story in shape so that you are explaining what investors want to hear:
- why you want to grow
- how you plan to scale
- who’s in your leadership program
- what’s your exit strategy
- your plans after you exit
This puts you and the investors on the same page right away.
4. Have strong leadership and experience within the company
Great companies are built around strong leaders, and this is always a concern …