Startup founders tend to be visionaries empowered with strong work ethic, energy and focus. As a result, it can be difficult for many aspiring startup founders to approach aspects of launching a startup at a measured pace. While an idea with the power to spark visions of a new business may occur in an instant, some of the practical processes associated with launching a startup take time. And it is important with your investment plan that some of the steps necessary for a startup launch are taken in a specific order. Failure to stick to a tried and true legal and startup financial strategy may imperil a new startup launch before it is even off the ground.
Is Your Idea Fully Formed?
It is generally a good idea to avoid contacting potential investors until your vision for your startup and your investment plan is fully formed. Investors are more likely to back your company if they can be assured that you have placed yourself in the best possible position to succeed. How do you know if your vision is fully formed? Essentially, you need to be able to pitch investors an idea that is well-researched in a host of different ways when you are launching a startup.
Before you create your investor pitch, first create a solid business plan. Even if you plan to utilize crowdfunding platforms and other non-traditional investment strategies that do not require you to present potential backers with a business investment plan, you need to develop all the components of a solid investment plan regardless. This document serves as your company’s most valuable frame of reference, especially before it formally launches. The values, processes and goals you draft here will also help you pitch investors as they seek a fully-realized idea to back.
Second, before you pitch investors. it is important to engage in market research and to know who your potential clients will be. It will be difficult to lure investors and seek funding if you are unsure of your target customers and whether or not your products and/or services will sell. Inherent in this part of the process is constructing models related to how much money you can expect to make over short, medium and longer periods of time. Some investors want to back projects that will pay off immediately, while others like playing a long-game. When you make your investor pitch, which one will your startup be?
Have Your Ironed Out the Details?
Having a vision is wonderful, but it is not a very useful resource if you are unsure of how to turn that vision into a reality and how to pitch investors. Do you know where you are going to set up your office(s)? Have you researched how many staff members you will initially need to hire and what their job descriptions will be? If you need to contract out specialty work in order to properly manufacture your products and/or provide services, do you know what companies you are going to collaborate with? You do not need to have every detail ironed out before seeking funding. But before you seek funding, you do need to have a solid investment plan and idea of how you are going to turn your vision for a startup launch into reality or seasoned investors will likely believe that you are not yet ready for significant investments when it comes to financing a startup.
Startup Assistance Is Available
If you are interested in financing a startup, please consider contacting LawTrades. We have guided more than 5,000 startups through the legal processes of financing, legal formation, investment plans and compliance. We also have significant experience related to recruitment, labor-based immigration, intellectual property protection, contracts and legal business strategy generally. If you are serious about seeking funding and launching a startup, please reach out to LawTrades today so that we can help you launch your startup.