It’s clear that you’re looking for capital before you start the business. However, as it’s been mentioned, you’d have better luck attracting an investor (or several investors) if you were actually running the business. If you can’t start the business without first raising some money, maybe start with crowdfunding or talk to your friends or family.
After you get the business going, consider the following for venture capitalists:
– What is your competitive edge? In short, there are hundreds, if not thousands, of businesses who currently do what you do. What sets you apart? What do you give to the industry that no one else does and that clients want and need?
– Can you demonstrate an actual need for what you do? Venture capitalists want to know that their investment is worthwhile. You have to show them that your little startup can reap big profits.
– Can you demonstrate that you can reach your target market? This is important. Sales need to be solid and you must demonstrate that you can continuously reach your market. Remember that while you think your business is the best thing ever, investors are looking to grow their investment.
– Make sure that your valuation is reasonable. Remember that most investors will want some sort of ownership of your business. Just like in Shark Tank, you must know how much ownership you’re willing to exchange for money.
– Consider whether the investors you plan to approach actually have a chance at increasing the value of the company within the next few years.
– Be ready to explain how you plan to use the investment (in writing). Potential investors want to see facts and figures. They want to know that they are making a good investment.
– Have an exit strategy. Investors want to know how they’re going to get their money back.
– Does your business plan showcase your industry and business experience?If it doesn’t, it needs to showcase yours as well as that of your management team.
If you need help forming your business entity or have other legal questions related to your startup, you should check out. We’ve helped thousands of people with great business ideas get their business up and running at an affordable rate. Stop by for a complimentary consult with one of our startup-focused attorneys.