By Andrea M. Garcia
Congratulations! You have successfully taken the leap and launched your small business. Now comes the tricky question of “what kind of funding do I need and how do I get it?” Well, the truth is there is not a simple answer to this heavy question. In fact, there are several steps for success that each entrepreneur should address before seeking investment. Let’s start the conversation with a few golden rules.
Company structure is power.
Spend the time to illustrate the value behind your organization to potential investors. Be able to answer why your business model is unique and what your executive team has done to establish the infrastructure needed for your industry.
Show the dream through your team.
Investors don’t just invest in your idea, your technology or your product – they invest in the value of your people. Effectively communicate why your people are important and what they bring to the company. How will your team be successful in collaboration and company growth?
Build your supporting documents.
Your messaging should be streamlined across your branding, from your website to your executive summary to your pitch deck, if you want to land the deal. Clearly communicate your intellectual property, your product, the market, your financial model, a reasonable valuation and, most importantly, your team.
Know your audience.
Every stage of raising capital is different. Your pitch to friends and family should be significantly different than your early-stage equity investors, venture capitalists and your series A, B and C rounds.
Engagement and strategy planning.
Be involved! Network for the connections you need to pursue strategic partnerships and build your value with potential investors. Ensure your website is updated and spend the time to research your target investors. What do many entrepreneurs NOT do? They don’t ask for the meeting or the investment. Ask for the meeting. Ask for the investment and be prepared to follow up regularly.
Create a clear financing plan and stick to it. Investors are busy and appreciate a direct
and cohesive approach to the funding diligence process.
Be prepared by following these guidelines:
- Set a company financing goal
- Determine your financing path (equity, grant funding or a combination)
- Have your investment documents ready
- Identify your target investors
- Create your engagement plan
- Execute and adjust your pitch
- Execute again
Andrea M. Garcia joined the New Mexico Start-Up Factory in 2018 as the company creation specialist, where she worked closely with entrepreneurs and scientists to commercialize their innovations, create investable companies and secure funding. She now serves as the vice president of operations and oversees all areas of the NMSUF portfolio.