Raising capital is hard work, particularly for startups or non listed companies. While there are always lots of people who want to invest, there are also many businesses like yours seeking investment. For those ventures that are not yet profitable or even generating revenue the battle for capital is even tougher.
Here are some capital raising tips that can help you in any market:
You need to allow at least 6-9 months to raise your capital. If capital is necessary to get you off the ground then you need to factor this into your timings and business plan. It can sometimes be quicker, but on average this is how long you should allow. Don’t wait till the creditors are knocking on the door before looking for funding (this doesn’t look great to the prospective investors either).
Australia’s startup ecosystem is still relatively young, and we have a very small Angel Investment pool, compared to for example USA or Asia. Reality is that for most startups Australia is still a tough environment to raise capital. Read more about Harvesting an Investment here>
Be prepared. Have a strong offer, the best offer you can make it. You need a well thought out business plan, a solid and experienced Board and Management team with a proven track record of achieving positive outcomes. You need a sound knowledge of your competitors along with a realistic and achievable 2 year forecast. You need to have a clear explanation of how the investors funds will be used, and when and how they will receive a return on that investment. All of this should be clearly laid out in your investor pitch deck, a presentation no longer than 20 minutes that outlines all of this in a structured and clear way.
3. Get in front of as many people as possible and network
Once your pitch deck is ready to go you need to get out in front of as many people as possible. Firstly, you need to test your pitch deck and practice presenting it. Take note of the questions people ask or gaps in your presentation that you can fix and refine. You never know who people know, so even if you are pitching to someone that isn’t the right fit for you, they may know someone who is. Keep those people informed of your progress along the way so that you stay front of mind for them and they can be part of your journey, just because they don’t want to invest now doesn’t mean they won’t want to later on down the track.
It is recommended that for the greatest success you have a trusted advisor to help you with securing capital. The Azure Group is experienced in working with startups and businesses that require funding. We can help you find the right investors and ensure that you are prepared when you get in front of them.
Have you noticed our #FridayExpertTips... here's one that relates to #CorporateAdvisory
"Have you developed fund raising strategies for your business? Be proactive and consider your companies cash flow runway and plan ahead."