Will work for money… 5 Must Haves

May 22, 2014
May 22, 2014 Mac Lackey

(Post One re: Raising capital from Angel Investors)

It’s the most talked about and often the most challenging part of every startup and every entrepreneur’s business life… And perhaps, although frustrating at times, it is as it should be.

Is your idea insanely great? Well, I am sure YOU think it is, but how do you prove it to others who are entrusting their money with you?

The capital raise process is largely about demonstrating that your startup has merit or momentum and that, in addition to your deep dedication to its success, the market agrees there is value.

Then to go from slight interest to steep demand, one of two things must happen:

1. Your business must already be demonstrating tremendous value. Therefore, it is obvious to investors that the trend might continue just as you hope.
2. You have generated significant investor interest in your business prior to or despite a lack of current momentum, and good old-fashioned supply and demand kick in: more investors than capacity to accommodate.

So how do you increase your chances for success in this process?

1. You must have a VERY clear value proposition (why the market needs this)
2. You must demonstrate your “edge” over the competition (why you)
3. You must have a very clear business model (HOW it works and makes money)
4. You must have domain expertise (WHO are you and why do they care)
5. You must have an exit strategy (how will you pay them back with returns that match the risk they are taking)

These must-haves should be clearly articulated in a short and concise presentation format (powerpoint, prezi, keynote, etc.), as well as in an even more concise executive summary/email format.

Once you believe you have these down, it’s time to go to step two (I will cover the next steps in upcoming posts).

Photo credit: urbanbohemian

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