I’ve never raised
investment before, but from speaking to a handful of friends and my
accountant I’m confident that the progress of my business means that it
is ready for venture capital funding and I’m keen to accelerate growth.
Without revealing too much about the business, it is in its third year,
has a turnover of £2.3m and profits of £600,000. My long-term plan is to
roll it out region by region with satellite offices, as most of our
clients are in the South East right now. What would you advise me to do
with respect to making the business attractive to investors?
culled from:startups.co.uk
A. Alastair Mitchell writes:
It’s becoming increasingly difficult to raise venture capital (VC)
in the UK. Despite the government’s best efforts to improve it, the
environment remains tough and there is a lot of competition from
companies all looking to secure funding for growth. The challenge is to
get your company noticed above all this noise. If you can convince a
number of high-profile people that what you are doing is a great idea –
and you have the courage to get out there and talk about it – your
credibility will increase. One of the best tips I can give you is to
attend as many networking events as you can. They are great for meeting
with venture capitalists (VCs) and also provide an excellent opportunity
to meet with other entrepreneurs. Entrepreneurship is like an
addiction and many people will have been through the mill a few times
and have a great contacts book of investors. Talk to them about your
business and mention that you’re looking for funding. There’s every
chance that they will know someone who might be interested. In keeping
with my networking advice, ensure that you use Linkedin to stay in touch
with contacts. You can then work out who can connect you to any
interesting VCs and ask them for a personal introduction by email.
Another tip is never, ever pay to pitch for funding because great VCs
don’t attend the kind of events that encourage this practice. When
meeting VCs, ensure that you know your metrics inside out – customer
acquisition cost, churn and lifetime value. And make sure you have solid
justifications for any projections. In addition, remember that you are
interviewing the VC just as much as they are interviewing you. You will
have to work with this person and company for three to five years, so be
certain that your ambitions are aligned with theirs. Good luck!
This comment has been removed by the author.
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ReplyDeleteBY AFOLABI TAIWO OLAIDE
the spirit of an entrepreneur is to be a risk taker. But not withstanding this before setting up a business, one needs to study the environment he/she wants to introduce his business into.
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ReplyDeleteADEWOLE ABOSEDE K
An entreprenuer should be ready to take risk,success is not what you can achieve in a day;it requires a gradual process. Motivational books, seminar on entreprenuership and articles like this could be of help sometimes.
ReplyDeleteADELEKE BEATRICE OMOLOLA
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BELLO ABDULAFEEZ OLAIDE
ReplyDeleteBefore setting up a business enterprise you must have the idea of the busines so as to avoid heavy risk
As an entrepreneur u must know the dos and don't of business before setting up. Attend many networking events that will enable you to meet with business dealers of high integrity. OYETUNJI IKEOLUWA EYITAYO
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ReplyDeleteOLALEYE OMOTOLANI OMOBOLAJI
ReplyDeleteSetting up a business requires planning and above all risk.
In any entrepreneur the manager is prone to facing lot of risk and he or she must know that profit does not come in immediately. The Manager is faced with so many challenges whereby he invest with his resources into the business. He is usually refer to as a risk taker. AKANGBE OKIKI-JESU CHRISTIANAH
ReplyDeleteTIJANI LATIFAT IBIDUNNI
ReplyDeleteWhen setting up a business you need to have an indebt uderstanding of the kind of business your venturing into