Unfortunately there is no hard and fast rule for this. However, there are some dos and don’ts that should be adhered to. Let’s assume the first and obvious one is covered off, which is having a great product or service to offer to lucrative market. There are many businesses that have that but fall down in other areas and fail to take full advantage of the opportunity before competitors enter the market.
The three elements discussed below all involve people and relationships, and are essential components to get investors to invest.
People –
Investors back people. Have a look at your team and honestly assess where it is not strong and do something about it. A board filled with well-known businesspeople with a track record of commercialising technology or businesses in the industry in which you operate will almost attract investment by itself. This is not possible in most cases but you see where I’m going. Talk to people to gain their support and see who they know who could join your board. Contact industry organisations and business groups to garner support. Allocate equity in the business to people who will either join your board or an Advisory Board, the aim is to name in the business plan or information memorandum. Leveraging off other people’s credibility is generally faster than working to establish your own.
Relationships –
Work hard to ensure all required relationships to deliver the business plan objectives are in place. The ideal is to show the investors that the external parties needed to commercialise the technology (for example) have been approached, are capable of delivering what is required, and an estimated cost has been given and allocated for in the budgets.
Third-Party Verification –
Collect testimonials, comments, case studies etc from people who count. These could be customers, future customers, industry bodies or other bodies with credibility. This carries a lot of weight in assessing the market viability of the offering.
Having these three elements in place will greatly increase investor comfort. It shows investors that not only do you take your business seriously, but other respected people and organisations also take your business seriously. Find out more about how we can help get investors to invest.
