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You’ve had your Eureka moment and there’s a bright light bulb above your head. You’re completely enthralled with your new business idea. That’s a great feeling, but finding the funding for your new business can turn that enthusiasm to frustration, confusion and even intimidation.
Asking people for money isn’t everyone’s idea of a great time. But if you consistently work hard, work smart, and work with determination, your “big idea” will find the funding it needs.
Here are five tips to increase your chances of success.
Be patient. Raising capital takes time.
If you’re like most entrepreneurs, patience isn’t your strong suit. Try to set realistic expectations for attaining the capital your project requires. It takes time for even the best business ideas to be capitalized. From beginning to end, expect the funding process to last at least six months, and it could possibly take a year or more.
If you feel like fast tracking the process, set your focus on a smaller portion of the overall amount of money needed. You can then use this lesser amount to test the market’s demand with a more basic product. Most investors prefer risking smaller chunks of capital, especially when an idea is still untested. Asking for less money will often make your pitch more appealing.
Roll up your sleeves. Raising capital is hard work.
Raising capital for business ventures isn’t easy and it’s often a full-time job. If you meet with twenty-five qualified investors, expect to “close” no more than one. But don’t let these odds get you down. Make sure you prepare properly for each meeting and keep playing the numbers game. Eventually, you will find the right match.
Manage your emotions. Stay focused. Prepare for stress.
People with access to the money you need are very important people and their plate is already very full. It isn’t easy getting a “face-to-face” with these VIPs, and when you do, it isn’t uncommon for them to cancel at the last minute. When you do meet, they’ll ask tough questions, tell you things you don’t want to hear, and generally make you uncomfortable. Staying calm, cool and collected is crucial for success. And when they tell you “no,” ask yourself how you can use the experience to improve your pitch for the next time.
Don’t stop. Keep your business moving forward.
Raising capital is a lengthy process. While you wait, you MUST keep moving your plan forward. Find a way to achieve even when the circumstances aren’t ideal. Not only will this make your business stronger, it will also make your next pitch stronger. Investors want to invest in someone who isn’t sitting on their laurels. They want to see that you know how to take action.
Don’t settle for “no.”
Children learn early on that “no” sometimes means “maybe,” and “maybe is halfway to “yes.” Persistence pays off. Learn from rejection, evaluate what went wrong and fix the problem. Then, take your improved pitch and ask again.
Investors like to see that you are determined. Demonstrating your steadfastness, patience and problem-solving abilities might be just the reason they need to get your project green lighted.