Investors receive hundreds of business proposals from entrepreneurs seeking funding. You therefore need to think about how to get the investor’s attention and translate that into financing, or else your great business idea will remain as just an idea. It goes without saying that investors are not in the business of betting their money on business ideas that will not work. You may be feeling strongly about the life-changing potential of your idea, but are unsure of how to attract investors. Consider several things that will make investors want to invest in your business.
First, you have better chances of getting financing if you are looking at an attractive opportunity whose timing is just right. Is your idea driven by customer need? Javier Loya, CEO of OTC Global Holdings, says: “You need to be sure of a ready market whose need you will solve profitably. If the market is not yet ready to embrace your idea, you may need to consider putting your plan on hold for now.”
That said, you need to place more emphasis on customer needs than revenues or staff. Before presenting your idea to investors, ask yourself a few important questions, like what makes the customer want to buy the product or service you are offering. Show the investors how your product will solve the customers’ problem and how you will price it. Is the price worth it? And why should a customer choose it and not a competitor’s? Your product/service should compel the customer to recommend it to others.
“Good employees also have a lot of value. Some investors may check their credentials and see how long they have been working for you,” says Javier Loya.
Some useful forums that you can make use of in order to know how to attract investors is those conferences where entrepreneurs present their ideas to a selected panel of investors who give their opinion on the chances of an idea getting funded. Here you can get valuable insights into how investors think of business ideas and businesses that are worth financing. Those participating also have a good opportunity to get funding if their presentations impress the investors.