There are so many different factors to consider when you are building a start-up. The market has been incredibly unpredictable over the last couple of years, and anyone hoping to get a clear idea of what the competition looks like will have had a lot to keep up with. Raising start-up capital can be a challenging proposition at the best of times, but with so much uncertainty out there, not to mention rising costs, it may be harder than usual to convince potential investors to part with their hard-earned cash. If you are a prospective founder, here are some tips.
Show your working
Any start-up founder knows that a great business plan is an absolute must when it comes to raising capital. Anyone can march into a boardroom with a great pitch and some attention-grabbing buzzwords, but what investors are looking for is something with a little more substance. You need to demonstrate how your business is going to run and how it is going to grow in the months and years ahead. You need to demonstrate that you have done extensive market research and that you are going to offer customers something that no one else is. You need to demonstrate that you have detailed customer profiles. In short, you need to show them that their investment has growth potential.
Consider investing yourself
Sadly, it is rare that a prospective founder is capable of summoning all the cash they need for their start-up from external sources. The majority of entrepreneurs have to gamble on themselves. Of course, raising the money is not as easy as all that. We don’t all have the necessary funds available to bring our dream businesses to fruition. One option is gaining investment through the Enterprise Investment Scheme, the Government scheme designed to encourage private investment into growing British companies, by offering attractive tax reliefs. If you are looking for an investment manager that invests through this scheme, Oxford Capital is one of the best examples out there. They offer an option to invest in early-stage businesses by backing founders and their teams to support their growth.
Don’t stop hustling
Any successful start-up entrepreneur will tell you that it is never smooth sailing all the way. If anyone tells you that they have never had a door slammed in their face (or as is more likely these days, an incredibly detailed pitch email that goes completely ignored), then they are lying. Investors and businesses are still plotting their course through the mess of the last two years, not to mention all the red tape and complications of Brexit. You are going to need a thick skin if you are going to raise enough capital for your dream business, and you are going to need to be persistent. Do not be afraid to cold call but do not give anyone a reason to warn people off talking to you. Be respectful and ask for feedback if the answer is a no. Chase up any missed messages and keep fine-tuning your approach with each setback.
This is a marathon, not a sprint, and it is worth remembering that an investor who said no a few months ago may well have changed their mind after they have had some success, or failures, elsewhere. Don’t stop hustling.