Whether you are starting a new business, buying a business or you've been in business one week or five years, an infusion of money is always welcome. But what type of fundraising is best for your business? There are so many factors to consider -- from the stage of your business to how much it'll cost to get the money -- that just choosing a path to raise money can be overwhelming.
However, you need financing - that infusion of money needed to start or expand your business. And that's where it becomes tricky. Obtaining financing is one of the biggest hurdles most entrepreneurs will have to overcome. If a bank loan won't cover what you need and you don't have any connections to investors, it can be tough to know where to begin.
Raising capital requires effectively communicating the value of your company to potential investors. You must clearly and succinctly show why your business is worthy of investment by focusing on the following three items.
- Team: Investors invest in great teams. You need to articulate why your team is a winner.
- Traction: Show Investors that your business has a clear path towards generating revenue, or is doing so already. Do your best to establish your market, whether it’s through finding soft or hard contracts, pre-sales, reviews from relevant influencers or trade organizations, or letters of intent (LOIs). All of these will help you raise capital.
- Return Strategy: Explain to Investors how you plan to provide them a return on their capital. By paying off debt obligations, generating dividends or selling a stake in your business, your business must fit into the Investor’s own business strategy.
P&G Business Consulting is willing to partner with you to assist you in fundraising for your business. We can assist you to conduct investment appraisal to assess the amount of funds required, the financing options available for your business, and seek for investors in your business. Contact us to book an appointment to discuss your business projects.
“There are two ‘i’s’ in Fundraising – they should stand for inspiration and innovation, not imitation and irritation.”