In today’s world we read stories every day about booming start-ups and case studies of entrepreneurial companies that have made it big. With the digital world making learning and access to knowledge easier than ever, the new business space is at a competitive high.
As all founders of organisations will know the biggest challenge can be funding your new venture. When I launched Bathrooms.com in 2004 I faced exactly the same challenges.
Since then I have managed to raise more than £10m in venture capital investment and the business has evolved from a side project to a £5 million a year business, with financial backing from Lord Rothschild through Augmentum Capital.
Having a wealth of insightful knowledge and tips on building a company from the ground up, having gained business financing sourced from two VCs, I’d like to share with you ten rules to follow when it comes to raising business investment:
1. When looking for investors you need to ask the question: what stage is the business at?
2. In the initial stages, you also need to ask yourself: how much do I want to raise?
3. Active investors attend networking events and conferences. So these are a great place to start meeting people and introducing your ideas.
4. Whether looking to expand a current business or start up a new one, the key points of a pitch should be as above.
5. Always think about who you are pitching to, rather than focusing too heavily on what you are pitching for.
6. I have been asked about a business involving more than one founder as a drawback, but I sit on the other side of the fence on this one. I would say that it actually lowers the investment risk.
7. In high business growth areas expect the market of investors to command the price. Where potential is high and USPs are very clear this will often be the case.
8. In terms of practicality it’s a good idea to involve a number of investors, to maximise your value when raising funds.
9. Smile and enjoy pitching! Nerves can get in the way when communicating your strategy and put potential investors off. Be confident in your idea, which in turn will fill your audience with confidence.
10. It can be really easy to try and over sell your business when you are so heavily involved. Only commit to things that you can prove and maintain in the future. A bad move to make would be to ruin your credibility and relationships.
As times change and pitching for investment becomes even more competitive it is important to make the most of business opportunities. The advice above is the product of years as a successful online retailer, but companies do differ case by case and should be planned and executed carefully.