Securing capital as a startup is no easy task but it is possible if you take the right steps before jumping straight into a pitch or business plan. This guide shows you some of the important steps you need to take before and during your journey to raise capital.
Think about and write down your product’s unique selling point (USP). By truly understanding what’s great about your product, you can build a successful investment pitch around it.
Create a simple but functional prototype to showcase the selling point of your product or service. To save costs you can keep your prototype simple, just highlighting the best bits and elaborating on further features during your business plan or pitch.
Test. Then Test Again
Find up to 500 people to test your product and give honest feedback. It’s at this point that you can eliminate any major issues, making it easier to sell your product when the time comes.
Get People Excited
Next, you’ll want to try and build some traction. Whether this is through Facebook, Twitter, Instagram or any other social site don’t stop trying to build interest. If you can get people excited about your product and prove that you’re doing so, you’ll have a much easier time raising the capital you need to take your business further.
Pre-Sell And Monetise
Unfortunately, before you even begin to pitch for investment, you’ll need to start selling your products on a lower level. Crowdfunding sites such as Kickstarter and Indiegogo are a great way to do this, as you can ask for funding in exchange for products but you should also start selling elsewhere, such as on your own website.
Hopefully, by this point, you should have made some money and will be able to scale up your product. If you’ve reached this stage, you’re ready to create a business plan that you’ll use to pitch to investors. Your business plan should be able to highlight the profitability of your business, strategies for unexpected losses, plans to move the company forward and much more.
Where To Look
The next step is actually finding the money and you’ll have to do some serious research to find out the best places to pitch. Thanks to a rise in entrepreneurialism over the last few years, a range of different websites have popped up to help pair startups with investors. Websites such as the Angel Investment Network allow UK startups to pitch their ideas online and help potential investors look for industry specific companies they’d like to be a part of.
Prove Your Worth
Once you’ve targeted investors, you need to use your negotiating skills to prove you’ve got what it takes. Don’t get greedy when liaising with potential investors and always offer a thorough breakdown of where their investment will be going. You have to be ready to answer ANY question in regards to your business, so make sure you’ve covered every scenario.
Don’t Give Up
As a startup, you’re likely to get several knockbacks when trying to raise capital. People aren’t willing to put their hard earned cash into any just business and even if you have the best pitch in the world, there will still be people who turn you down. The important thing to remember is when you do get rejected, always ask for feedback as to why. This will help you to understand where you went wrong, so you can refine your business plan for future pitches.