Growing your company is easier when you have cash on hand. However, you need to have a plan in place to get this capital. Learn how to get the funds you need to expand your business with these five tips.
Assess Your Needs
Raising capital can be time consuming and complex. That's why you want to ensure you are choosing the right strategy for funding your business. Evaluate whether your company needs to go public right now and consider an initial public offering to distribute shares. The work involved in this process can require extensive documentation, such as drafting and signing underwriting agreements with investment banks, and this is all before even filing with the U.S. Security Exchange Commission. Evaluate your business's needs by verifying the size of the company and the business's growth stage. For example, seeking public offerings or even angel investors may not be the ideal fiscal growth strategy to pursue when you are a start-up without a clear idea of your revenue model or target customer segmentation. You may want to consider starting a crowdfunding campaign that can generate funds in a shorter amount of time as an alternative.
Know How Much Capital You Need
Understanding how much capital you need is an essential initial step in raising funds for your business. You want to create a financial plan that expresses the funding goal you need. If your company needs money to support staff and operations while introducing a product, then you need to know how much is really required to sustain operations. Additionally, it's advisable not to raise more funding than you need so that you have more equity in your business. For example, if you raise more funds than what your company is worth today, then your investors can own more equity than you. Raising too much capital too early can mean less equity for you and future partners.
Research Different Types of Funding Options
It's always ideal to search for funding alternatives when you're trying to raise business funds. A local or college library can be a great start for conducting extensive funding searches. You can also get funding advice on where to get loans from a mentor or consultant from a local business center, such as a university-hosted small-business development center or a U.S. Small Business Administration district office. Finally, you can also check online for crowdfunding platforms to help you raise capital for a project for your business or to develop a prototype.
The best way to persuade a group of people to give you their hard-earned cash in boat loads is to be prepared to deliver a compelling case. That's why it's important to practice pitching before you ask for funding. Whether this is a weekly practice or something you do daily to stay on your feet, it has to be frequent so you can be prepared for whatever questions may come your way.
Get Exposure to Investors
It's not enough to think investors will start knocking on your door once you build a prototype or even make a few sales. Go where the money is and do the footwork to find and build rapport with investors. Getting acquainted with the right people can take several months, but it's worthwhile because it can lead you to a deal and even knowledgeable investors that want to add value through their expertise. That means attending industry-specific conferences that feature angel investors and venture capitalists or attending networking events to meet mentors and other entrepreneurs who can provide you with insight and referrals to investors.
Maintaining the momentum of your company's growth is easier when you have cash on hand. Putting these growth strategy tips into practice will give your company the chance to raise funds from the right investors to expand your business.#raisecapital #smartgrowth #contentmarketing