If you’re opting to bring investors into your business, whether that’s through private equity, venture capital, or angel investors, it’s a big decision, and it’s one that you can make go more smoothly. By taking certain steps before you even begin speaking with investors, your business will be more appealing to them. The more attractive your business, the more money you’re likely to get, and the better the terms will be for you.
Below are five of the best ways you can prepare your business for investors, and make it so compelling they won’t be able to say no to giving you money.
- Get All of Your Records In Order
If you’re looking for new investors and capital for your business, being disorganized and having outdated records simply won’t work. You may be able to sell the benefits of investing in your business, but you need the paperwork to back it all up. When you’re busy operating a business at the day-to-day level, it can be easy to let documents and records slip to the backburner, but as soon as you start considering investors, it’s time to get them up-to-date.
- Get a Valuation
Don’t wait until you’re too far in the process of finding investors to get a professional valuation. Investors are going to want to know how much your business is worth, and the faster you can get them an accurate view of that value, the better off you are. The more quickly you can start looking at your records and your numbers, the more prepared you’ll be. The more years you can include in your audit, the better. It’s all about creating a sense of confidence in your investors.
- Start Cutting Costs
If you want to make your business look great to investors of all types, you want to create upward trends in your revenue. One of the simplest ways to do that, even over the short-term, is to look through your records and identify places where you can eliminate waste and cut costs. The lower the costs and the more you’re bringing in, the better you’re going to look to investors.
- Develop a Plan For Growth
Your investors don’t just want to see what you’re doing at the moment you’re speaking with them. They also want to see how you plan to grow, so create a strong growth plan that gives them a long-term perspective of where you want to go. Anything you can do to increase their confidence is going to make your investment proposition that much more attractive.
- Set-Up A Virtual Data Room
Many of the tips mentioned on this list center around making sure your records are up-to-date, your paperwork is in order, and you can show investors your numbers in a streamlined, accurate way. A big part of being able to keep these documents organized and available to potential investors is putting them in a virtual data room, which is secure and gives investors convenient, centralized access. It’s also good to use this type of document and records storage repository because it creates a feeling of trust and transparency that most investors are likely to find appealing.