Are you planning to raise capital for your newly-started business? Of the various tools to raise capital, below are the most important ones that you should always remember.
· Your Business Plan And The Market
A unique business plan and a sizable and scalable market are the most important tools to raise capital. In the absence of these two, chasing an investor would be sheer wastage of time. Make sure you have a brilliant business idea that can set a new trend in the market and instantly grab customers’ attention; that should be something the customers cannot do without. Such ideas are great head-turners for the professional investors, especially the venture capitalists.
· Business Valuation
To ensure that you value your business correctly in front of the investors, it is very important to determine the value of your business at the very beginning. Business valuation will help you identify the loopholes in your business and rectify them as early as possible so that you can boost the value of your business further. Any professional investor would like to see this aspect while exploring your venture so make sure all your documents are at the right place.
· The Right Investor
The right investor is also one of the most significant tools to raise capital as it is only source that can provide you with the capital for your startup. Until you find the right investor, you won’t be able to convince them to bring out the dollar to the table. Now who is the right investor? It is someone who is interested in your industry sector. If yours is a tech startup, try to chase only those investors who are looking to invest in the same sector. To save time, it is best to go through their websites and then approach the investors.
· Your First Pitch
Your first pitch can be a game changer so play it safe always. A lot of preparation goes into this and then you come up an ultimate product that is no less than a platinum deal; something that the investors won’t be able to resist. Make it simple, clean, exciting and strong. You need not make your first pitch tool long and descriptive; just try to say something that can create curiosity within the mind of the investors.
· A Strong Value Proposition
Make sure you have a logical answer to the question “why should customers buy your product or service?” Do you have a strong and valid answer to this? If yes, you are a winner. You have to convince the investors by demonstrating how your business is the only solution to a prevailing issue. You can also back your demonstration with the help of a set of beta customers. Prove to them that you are targeting a sizable market and that your product/service will remain in demand even when your competitors arrive.
So these are the best tools to raise capital that you can rely on at any given point of time. Raising capital is no cakewalk, you have to do a lot of preparation and planning and the above aspects, if kept in mind, will only make you a stronger entrepreneur than others.
For more information on tools to raise capital, feel free to visit http://mergeralpha.com/.