Are you looking for an investor? Do you know what investors are looking for in you?

Equity finance is a way of raising capital from external investors in return for a share of your business. Raising capital can be a time-consuming process and will require you to disclose a lot about your business, you and your management team. A key aspect is making sure you have suitable professional advisers working on your behalf.

The first step in preparing to raise any type of capital is the production of a detailed business plan that includes a detailed marketing plan and realistic financial projections. Investors are of course going to look at the hard facts of the business, your past performance and forecasts for the future, but they will also want to see that your business stands out from your competitors.

Here are some of the items to consider:

1. Managing the Company’s money. Investors are not looking to support businesses that have run out of money or are in debt. They will be looking for evidence of a healthy bank balance, not only to back up cash flow claims but to prove that your company is frugal and spending and saving wisely.

2. Dealing with change and demands. All Investors want to see a company that is able to respond to market challenges and opportunities. Demonstrate where the business has proved that it has recognised the need to change and what you did along with time taken to achieve the change.

3. Experience. All Investors are looking for proof that the owner and management team have solid business skills and understand how to manage the business, you are after all ask them to give you their money. Use problems the business has experienced in the past as a means of demonstrating your overall ability to turn things around quickly.

4. The Customer is King or Queen. All Investors are very aware of the importance of customers. The amount the business invests in customer care not just in money terms will help your potential investors achieve a level of confidence in their gaining a return on the money invested. It is critical that you show that you and your business understand who your customers are and what they want.

5. Commitment. All investors are looking for you and your management team’s commitment in the future plans for the business. Before you consider speaking to any investor your key task is to ensure that everyone backs the vision of the future that you and they will be presenting. Investors spend a lot of time talking to business owners and their managers and can tell very quickly when the story does hang together.

Remember you are asking an investor to put their money into your company. The more you can provide the evidence that they will make a suitable return the greater the chance you have of gaining their involvement.


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