A startup has a lot of challenges to overcome and a lot of questions to find answers to. One of them is, how to get good funding to accelerate your startup plan. Against a few reasons that a company has to invest, they have lots of reasons to say “no” to you. Understanding these reasons will help you to read your investor’s mind. Here we have some of those reasons. You should keep them in mind and diligently working on them will make your pitch worth considering for your investors. #ThinkWithNiche
Not only at the beginning stage, but the need for funding can also arise anytime later in your journey. Therefore, it’s necessary to have a strong command of how you are going to approach an “angel investor." As you are searching for investors, investors are too looking for a real diamond in glass stones, which can return them a lot of profit. No investor will ever wish to invest in a company which he thinks lacks potential in various aspects. There are over 150 million startups in the world and you are one of them. To have a proficient investor onboard, you need to outshine your competition.
Showcase Your Talent Without Hyping
The co-founders of the startup must be excellent in leadership and management skills. Both the owner and employee should work in coordination to improve their efficiency. You cannot lure them from a facade. They will look into your house before signing any deal. Why will they invest if workers have no enthusiasm for their job? Show them that your business is worth putting money in. Have a clear insight into the market you are entering, your rivals, tough competitors, startups who might be the next appointment of your investors. Highlight the uniqueness of the solutions that you present. Point out the weak points of your competitors and how you are excelling them.
Investors will judge you based on your financial stability also. You need not be very sound from the scratch, but you should show your real status. Mind it, they have rejected numerous deals before giving you an appointment. They can easily catch manipulative figures. They are looking to assurance that you have enough money to reach your next bigger target. Present the actual cost and how you will cover it.
Have A Plan Not An Idea
You can't step into an investor’s office with a vague idea of how you are going to sell your product. You need a solid business plan. They want to see robustness in your business model. A business plan should cover details like the structure of the startup, the market you are entering, your buyer’s persona, marketing, and sales plans, how much money you need, future goals, and proper documentation are some of them. You must show them where your business will stand after a few years. This is only possible if you are clear with what path you have chosen to meet your goals. Investors will not even think before rejecting if you lack a good business model.
You are not asking for money, you are here to build a good relationship with your investors. And no relationship can thrive on shaking grounds of trust. After all, you are dealing with human beings who can connect with your product. If they don’t trust you, no matter how strong our plans are, they will not take a penny out of their pocket. Documents are signed at the last stage. First, they will make judgments on your leadership, character, decision-making skills. It will always be good if you improve your businessman aroma.
Investors need to fall in love with your product in order to risk their money. What they need is a clear path to profit. Your job is to shine a light on that very path. Show them the bright side, strengthen your presentation with all the data and figures, but don’t exaggerate. Finding investors is one of the toughest tasks, and building trust when you are just starting needs expertise in soft skills. Weed out every reason an investor can think of to not invest from its roots.