Obtaining money for an entrepreneurial company is really pretty simple — it’s just another sale.
Your customer has something you want–their money. You have something they want, equity or a piece of the action of the potential growth of your enterprise.
The key, as in all sales, is to determine the right price and close the sale.
To do that, you have to develop a financial marketing mindset. Just as you would prepare a marketing program to sell your product or service, you need to prepare a financial marketing program.
Develop and practice a verbal pitch, develop a marketing scheme, present the package, and close the sale. It takes intimate knowledge, unbounded enthusiasm, and a scuff-resistant ego.
Before you write your funding presentation – THINK!
Yes do it…most people looking for funding don’t — they make the fatal mistake of pitching their great idea and NOT thinking about their audience “The Investor”.
Often people completely forget to think who is my customer, what do THEY want to hear, how should I present to them, what is their ‘sweet spot’, what will ‘turn them on’ to my idea over the 100s of others on offer and what will make them want to buy (invest)…
In the world of finance and money raising this is not all about you and your great widget but about things that they want to hear like:
- How much do I want to raise and how much have I raised so far?
- How much will I return and when?
- How will I make their money 10x bigger?
- How will I do this is a tax efficient way for them?
- How do I make this pitch and return potential believable?
- Will I offer a fair price for my shares vs. the stage and the risk?
- Who else has invested, especially if it’s someone they know/respect?
- Will I be a good fit for them and will I make life easy for them as an investor?
These are just a few ideas but you can quickly see how different this approach is to the business plan you have written and the excitement you have for your ‘baby’…
It’s all about the customer – your investor!
Last 3 posts by Jon Gillespie-Brown
- Awesome video from Vinod Khosla at Startup Grind - February 12th, 2014
- Fundraising: Just when I thought it had all been said… - August 8th, 2013
- The excellent book “Venture Deals” advice: Be smart, get a stable of experienced mentors - March 26th, 2012