investors, angel-investorsI am a small entrepreneur and I already have a business up and running (5 years and counting), however I am not rich (its expensive to run a business and less glamorous, I tell you!).
However, I have this “x service” and I want to start a new business with it. In gross terms, this “service” reduces the costs of the IT industry, so it could generate a lot of money and the customers are well known (and there are a lot of them).
But, my problem is I want to build a business of $100m (if not a unicorn). However, most investors and VC that I have seen are small fries, a relative one obtained 80k in a round (for a different project). For a single person (or a paper company that will go to nowhere), 80k is big money. However, for a real business, 80k is no more than spare change.
So my question is how to deal with more serious investors?. For me, it’s the first time dealing with investors and I want to jump to the big leagues (or am I wrong?).
Should I do a meeting with many investors (maybe in a conference room?) or visits each investor?.
Does some sort of organization with investors exist?.
What should I use?. Powerpoint for presentations?. Should I use a tie and formal dress? or informal? (such like Steve Jobs style).
Should I knock the door of Microsoft directly? (to say a name for example).
IMHO, the first investor will open the doors for other investors, so I hope to give a good deal to the first one. However, I hope seriously for the first deal, i.e. anything lower than $1m is not serious at all. Should I be pushy?.
PS: In reality, I am not highly in need for money, I can run this business with my own resources. However, I want money to accelerate growth.
PS2: I don’t have doubts about the value of the service. In fact, I think that I am sub-valuating it.
Startups falling in the category stated below is common. However, as an entrepreneur, you will need to rekindle your gusto to move ahead and push yourself to move the stone ahead.
Categories that demotivates entrepreneurs:
If you are serious about your business, you might need to sit and revisit your business plan to understand where things failed and what makes you think to pull the plug. Recreate your business plan, most importantly the cash flow, market plan and capitalization table (CAP) that will help you decide on the next steps.
If you would want to sell your business to someone, then you might need to show (value) your assets and liabilities (particularly if you have any long-term such as bonds, payables, etc).
When business valuation is complete, the report will provide you enough source to sell your business or to pump in the extra cash to run your business.
Five years in a business, you are not rich, but you have a different idea that will make you and others multi-millionaires? Do you know how much it will cost to launch the service? Do you know who your customers are? Can you explain why they would pay you and not someone else for the service?
Investment money comes from someone, somewhere. It could be a pension fund for thousands of people. It could be the profits from other businesses being re-invested. Can you come up with a million good reasons why someone should take that hard earned cash and give it to you?
Start the business small, then grow. If the service is as great as you say it is, you should not have problems getting family/friends to inject their cold hard cash for a quick fast buck.
When you can show a few examples of the benefits, then seek out investment (perhaps with the help of a good accountant/lawyer). Your experience, and product means more than if you turn up with a suit or a donald the ronald costume.
A good product or service will generate it’s own momentum.
Best of luck.
All content is licensed under CC BY-SA 3.0.