If you are an entrepreneur and are ready to take your business to new heights, the most important question in your mind would be, “How exactly do I get my first Investor?”. Let me tell you. It is not an easy task. For example, Saurav Agarwal, an angel investor in Kolkata, says there are 3 key factors an investor believes in,
Step 1 : Know Your Business You the business owner are expected to understand your business from inside to out. That includes knowing the KPIs of your business. A simple way to look at KPI is the ratio of output to input. For example, in terms of sales, your KPI would be, ‘Total no. of sales’ or ‘Total sales revenue’ / ‘Total no. of calls made’ or ‘Total amount spent on boosting sales’. This is an important parameter for an investor to measure the standing of your business. Step 2 : Know Your Market The potential of your business idea lies in the kind of demand it has or will have in the market. Understanding exactly how the market need ties into your business model is key to ensure the success of your business. There are a lot of ways to go about this kind of an analysis. Usually following the most influential businesses in your domain is a good place to start. If your business is in any way tech oriented or dependant, then keeping yourself updated on the latest and upcoming developments in tech would be crucial to drawing up your business strategy. An extensive research on this front would prepare you for a significant amount of questions the investor might have. Step 3 : Prepare and Practice Your Pitch This is the most important and often overlooked step that a business owner should consider. An angel investor in most likelihood has already been approached by numerous other entrepreneurs. It is crucial that your pitch does not seem like just another idea that gets lost in the crowd. Take some time to draw up the key points that you think makes your business idea stand out from the rest. Also if your business idea is related to(not an exact copy of) an existing successful one, then do not hesitate to compare the two. It helps the investor understand your idea much faster. It might seem that having a completely out of the box business idea is what an investor would be interested in, but explaining the viability of such an idea is extremely difficult. Don’t forget, even WhatsApp is just a far more successful version of BBM. Put yourself in an investor’s shoes when formulating your ideas into your pitch. Also consider the persona of the investor when getting your pitch ready. For instance, an angel investor in Mumbai will have a different interpretation of the market than an angel investor in Kolkata. So do your research before you decide on which investor you want to pitch to. Step 4 : Choose The Correct Investor As an extension of the previous step, there are a few more factors that one must consider before choosing his investor. An investor is not only someone who puts in capital for your business but also brings in years of experience he has in the relevant industries that he has worked or invested in. He brings in his own set of skills and expertise that could be very beneficial to an organization. Choosing an investor who has invested in or has an extensive know how of your business sector would not only be an added bonus for you but also a reason for the investor to consider investing in your business. Step 5 : Research Your Investor Once you have chosen your investor, now its time to research their investments in detail. Figure out why the investor chose to invest in his ongoing ventures and see if you can find similar reasons for him to invest in yours. Research the progress of those ventures and figure out what kind of expectations the investor might have. For example, an angel investor in Kolkata will most likely have different expectations than an angel investor in New Delhi, just because of the varying business scenarios in the different cities. Compare your business plan to the results of your analysis and see if there are ways to come up with a better one. Once you’ve ticked off all the steps in your checklist, just proceed to Step No. 6, The Bonus Step! Have a good night’s rest, wake up in the morning and go meet your investor in your best mood. He wants your business to succeed just as much as you do. Good Luck
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March 2021
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