By admin on September 21st, 2017 in Bootstrap
It's always hard to get investment for your start-up but in an economic downturn it's even harder. However, if you can develop a business that is successful during a recession the chances are that it will be even more successful during an economic up turn. Here are some straight talk tips that will point you in the right direction.
1) Traction is the key to getting investment. In a recession, start-ups must be further up the traction ladder. This means that you will have to bootstrap and self fund until you at least start making sales and even better generating profit.
2) Investment is to help you scale and not to help you start up . Particularly in difficult economic times, investment will only go to businesses that can use it to scale.
3) You should not contact potential investors directly. This certainly applies to VCs. If you contact them directly or send in a business plan you are wasting your time. They rely on recommendations from advocates, CPAs and trusted advisers. You have to go through these to get to the VC. Also, you will probably come into contact with a Business Angel through someone in your network.
So the question is, how do you get recommended to potential investors? The answer is very simple. Be excellent at what you do. Forget spending your time on exemplary activities and focus on developing the fundamentals of your business. Focus on the money engine. While seeking investment, the old adage is true – "if you build it they will come" but only if it's really good and can give great ROI. Send press releases and build a "published press release portfolio". This will help you get on investors' radar.
4) Spend your time building a business and not writing a 50+ page business plan for investors. You must have your own internal strategic roadmap but the mistake many entrepreneurs make is to write a complicated thesis style business plan for investors. This will actually discourage potential investors from reading your plan. Instead provide investors with a 10-15 slide deck in the form of a print out or PDF. Again be aware that your Traction slide is by far the most important.