There’s a lot to like about being an entrepreneur and working for yourself. You get to make your own schedule and set your own hours. You can focus on developing those products and services that you want, that most interest you, all without any interference or unwanted oversight. You can take responsibility of your work life and your career destiny – all while working from home.
But working on your own and for yourself carries its disadvantages, too. Primarily, it requires you to be a creator, an accountant, a business manager, and a salesperson depending on specific day-to-day needs. These days it also requires that you work as a web developer, integrate with social media, and have sufficient leadership training to manage your employees in a digital world. More so than ever before, the modern entrepreneur truly needs to be a jack of all trades.
While even the creative types among us can make a budget when called upon, it’s another story when capital raising in concerned. All entrepreneurs need money to turn their idea into a product, and almost all of them will need to seek outside funding sources in order to amass sufficient funds. This means courting investors, pitching a business plan, and forecasting future financial growth. Bringing in money means acting like a salesman, but rather than selling a product you are peddling an investment – a difficult undertaking for the average entrepreneur.
Here are a few tips for strengthening your investor-courting skills:
-Start with friends and family members. Before venturing out into the unforgiving venture capital world, start by perfecting your pitch with discerning friends and family members – especially those who have some money and a business background. You’ll definitely get some good practice and you may even find an investor or two in the process.
-Don’t be shy. Entrepreneurs courting investors at trade shows and over the phone often assess their bid by admitting that they were too passive in their pitch, that they didn’t push the issue hard enough. While asking someone for money may seem like an undertaking that shouldn’t be pursued aggressively, a more insistent and forceful approach is usually necessary to convince an investor of your benefits and your zeal.
-The more the better. When it comes to preparing forecasted financial statements, you really can’t go wrong by including every possible data point and any applicable reference, footnote, or stipulation. Even if a given number doesn’t appear incredible, providing full transparency to potential investors is only going to make them more reassured and help them truth your credibility and competency even further.
-Tighten your story. Investors are often more interested in numbers than in emotional appeals, meaning that a story or mission that may gain favor among consumers might not sway an investor in the least. Still, it is always important to deliver a story and a plan alongside your financials – just make sure that it is a concise and condensed one.
-Consider equity stakes. Many entrepreneurs shudder at the idea of diluting their ownership and providing investors with a stake in their company. But this stake doesn’t need to guarantee any voting rights and it may give you the opportunity to raise far more capital than you otherwise would. For some entrepreneurs, then, this is a good route to consider.
These are just a few tips to keep in mind when trying to raise funding for your business, product, or project. While seeking out capital may not make for a fun experience, it is just one of the many tasks assigned to the entrepreneur – and one of many that he is capable of doing well.