As a business owner, you may be looking for ways to secure business funding for your company. Whether you’re seeking a loan from a bank or an investment from venture capitalists, it’s important to know what potential investors are looking for before you approach them.
Here are some key factors that investors will consider when evaluating your business:
- Your business model. Investors want to see a clear and concise explanation of how your business makes money.
- They’ll also want to see evidence that your model is sustainable in the long term.
- Your competitive advantage.
What sets your business apart from the competition?
This is an important question for investors to answer, as they’ll want to know why they should invest in your company over others.
- Your team. Investors will want to see that your company is led by a strong and experienced management team.
They’ll also want to know that your team has the skills and abilities to execute your business plan successfully.
- Your financials. Of course, investors will want to see that your company is financially healthy and has potential for growth.
They’ll want to see detailed financial statements and projections.
- Your market opportunity. Investors will want to know that your company is targeting a large and growing market.
They’ll also want to see evidence that you have a solid plan for capturing a significant portion of that market.
By understanding what investors are looking for, you can better prepare yourself when seeking funding for your business.
Be sure to have a clear and concise explanation of your business model, competitive advantage, and market opportunity.
And, of course, make sure your financials are in order.
BUSINESS FUNDING COMPONENTS INVESTORS LOOK AT
VISION: Does the team have a clear, concise explanation of their business?
MISSION: Does the team have a clear, concise explanation of how they plan to make money?
GOALS: Does the team have achievable goals that are relevant to the business?
OBJECTIVES: Does the team have objectives that are relevant to making money and achieving goals?
STRATEGY: Does the team have a sustainable strategy for making money and achieving goals?
TACTICS: Do the tactics support the strategy and help achieve the objectives?
EXECUTION: Can the team execute their plan effectively?
FINANCIALS: Are the financials in order and do they show potential for growth?
MARKET OPPORTUNITY: Is the market large and growing?
COMPETITIVE ADVANTAGE: What sets the business apart from the competition?
MANAGEMENT TEAM: Is the management team strong and experienced?
RESEARCH: Investigate all different types of Business Funding don’t settle on just one:
- SBA Loans
- Bank Loans
- Venture Capital
- Angel Investors
- Business Grants
Compare and contrast the different types of funding to see which one makes the most sense for your business.
There is no one-size-fits-all when it comes to business funding, so be sure to do your research and choose the option that is best for your company.
SIMPLICITY: Keep the business model, goals, objectives, strategy, tactics, execution, and financials simple.
SCALABILITY: Is the business model scalable? Can the company grow without additional investment?
SUSTAINABILITY: Is the business model sustainable? Can the company continue to make money over the long term?
These are just a few of the things that investors will look for when considering funding your business.
Be sure to take the time to understand what they’re looking for and have a plan in place to address their concerns.
With a little preparation, you’ll be well on your way to securing the funding you need to grow your business.
Check out this Business Funding Calculator to see how much funding your business could qualify for.