START-UP ADVICE

MAKE IT START UP ADVICE
So it’s that time again. You’ve
finished the last phase of your
primary plan and business is
running smoothly. And if it’s
taken one year or one decade,
you’re pretty pleased with
yourself, but what next? The
options are endless, and you’ve got
just the idea to get your company from
solvent to soaring. But you’ll need an
investor...
Whether you’re a small start up
looking for pocket money or a larger
business seeking a cash injection, the
basics are the same. While a smaller
operation will be looking for not only
cash but connections and expertise,
a larger business may simply need
the capital. If it’s pennies and pounds
you’re after, but have all the help in
house, then a silent investor seems
ideal. You just want to take the money
and crack on, but it’s never that
simple. When forking over their funds,
an investor may want to have a hand
in the running, which can cause issues
both ends.
The larger the investment, the more
control you’re going to give up, thus
the larger the exit needs to be, so get
your risks realised in the first instance.
Take your time! Think of it as the
British do with their tea ... It needs
time to brew! And if you rush it you’ll
end up with something weak and
unsatisfying.
You wouldn’t hire the first person you
interviewed for a vacancy in house,
so take the same approach and do
your research. But as with tea, don’t
let it steep, or you foil the flavour.
Over analysing costs your company
precious time and profits, so be
patient but proactive.
To make sure investor acquisition is a
breeze, use these three key steps and
you’ll make sure your partnership is to
everyone’s taste.
14
1. START STRONG
Make sure you have a killer business plan
on paper, one that not even the wariest
of investors will be able to pass up. Pull in
your marketing and advertising experts
and make sure you appeal to your potential
partners. Make yourself an opportunity not
to be missed, and you’ll ensure you have
the pick of professional when it comes
down to choosing the perfect person.
The business plan needs to be clean and
clear. You need to show how much you’ll
need, where you’ll be spending it and what
your schedule of repayment will be.
Make sure to use your contacts wisely, find
someone who considers the transaction an
excellent deal on both sides, so you start on
equal ground. This should feel like a winwin
for you both, not one of you doing the
other a favour. Be fully prepared from day
one, or you’ll affect not only your finances
but your reputation, too.
Decide on what sort of investor you want.
An Angel Investor may sound ideal, but you
may miss out on expertise if you only see
that person at quarterly board meetings.
A partner with a passion for your business
and the intention of getting involved could
end up an essential asset, but make sure
you will be on the same page.
Make sure you thoroughly research
Investor Thesis - make sure you know what
makes specific investors tick so that you
don’t go knowing on an investor’s door with
a social network for pets when the investor
only puts money into hardware tech, for
example.
You might want to take a look at
crowdfunding. Maybe you don’t need an
Angel investor but a whole host of investors
depending on what you want out of raising
finance. Something like a Seedrs campaign
might be just the thing you’re looking for, as
they fill the gap in the early-stage funding
landscape by giving innovative startups
much more efficient access to a larger pool
of investors throughout Europe to help
them get their business off the ground and
grow.
Above all, start strong, get your ethos, your
intentions and your business plan on paper
and make sure that any investor is clear on
your game plan from day one.
2. NETWORK
Some people may tell you that all money
is green, so surely it doesn’t matter where
it comes from? But this is like saying all
entrepreneurs are made equal, and have
the same assets and qualities. Not true.
There are a range of skill sets and expertise
out there, so get out and find someone
who not only has the hard cash, but can
also bring more than just money to the
table.
Consider the connections that an investor
can offer. If you have an appealing
investment, you’re in the driving seat and
have the luxury of being able to choose
from what essentially become candidates.
So take your time to take your pick, make
sure you meet with as many potentials
as you can. Make it known you’re in the
market to be on the market and get
yourself out there.
Once you’ve collected some colleagues
for consideration, find out how strong
their own circle is. A contractor who has
worked with your competitors is an obvious
advantageous addition. This isn’t about
stealing secrets, it’s about familiarising
yourself with industry best practice.
And you may find within your circle of
contractors a lead, or even the man himself,
with experience that will offer your team
the best insight to how to get the edge
and keep ahead of the curve over your
competitors.
Also, a contact from your competitor will
be able to tell you who missed out when
it came to their companies growth plan. If
you’re in the same marketplace with similar
businesses who have been expanding,
they’ll have been fund raising before you.
Ok, so the best choice for them may have
been snapped up, but there will still be
some bullish investors in the background
who may be ripe for introduction.
So use that contact and buy that man a
beer... He’s already prepped to invest,
knowledgeable in the field and, although
he may have come a close second to
your competitors choice, that may work
out great for you. Maybe they weren’t a
personal fit? Find out why they weren’t
chosen, and if the reason isn’t applicable
to you then you just found your man (or
woman!). And if not, ask him who he knows
that may be?
Your investor is out there, but they won’t
necessarily be looking for you, so be
proactive, get networking and sell yourself
as an unmissable opportunity. And once
the offers are pouring in, you’re ready for
step three.