Entrepreneurship and the Art of Raising Capital Funds

Business Plans that Can Influence Investors and Win Profits, Reprinted from "The Entrepreneurship Development Review"

Abstract

To attract investors, to invest in your business there are many factors that need to be taken into account. Firstly, entrepreneurs must understand what turns investors “on” and “off”, what type of investors to look for and the type of information to present them with. Getting investors on board doesn’t mean that you need to be a good sales person, however, need to be good at selling the “steak” not the “sizzle”. There are many “turn on” factors, such as, Investors like to see a product or service that will sell, by getting feedback from customers. They prefer the entrepreneur to approach them at an early stage, in order for them to give constructive feedback, which will allow them to adjust the product or service accordingly. Investors like equity in the business and like to see managerial competence. Some “turn offs” are, entrepreneurs are too product orientated, rather than focusing on the customer, sales projections and valuation of their business is not realistic. However, entrepreneurs looking to raise capital funds must be able to differentiate between investors and must be able to find the right financier by determining if they need short, intermediate or long-term financing. Lenders on the other hand, look for a detailed business plan, projects that are viable in the long run. Some lenders are willing to take greater risks than others, such as venture capitalists, they also like to see collateral, in case of bankruptcy.