Is It Time to Secure an Investor? 3 Important Questions to Ask

Is It Time to Secure an Investor? 3 Important Questions to Ask

find a business investor

Are you looking for an investor for your business idea? Spearheading a small business or getting a startup off the ground is exciting, but can be a lot of work. Looking for a business partner or investor, growing your contact list and building a team of employees are all potential obstacles in the process of making your dreams a reality. The first step to a successful launch is gauging whether or not your company is ready to secure an investor.

Ready to get your company going? Ask yourself the essential questions before you venture out into the world looking for investors in your company

7 questions to determine if you’re ready for an investor

In order to provide a stable work environment for yourself and any business partners, there are basic business and financial questions you should ask first. By doing so, you’ll maximize your ability to communicate and make the best plan for success. 

1. Do you have financials in order?

The first question investors will ask when reviewing your business pitch is whether the numbers add up. If organization isn’t your strong suit, consider using a budgeting service specifically for business like Mint.com or GoodBudget. Having your financials in order, and clearly written out, will make your business approachable and an investor’s job easier. 

You might have been able to get your company launched with amateur bookkeeping, but any serious investor is going to be looking for real data on the potential upside of investing with you. If you’ve squeaked by without great records in the past, take time or get help to get your financials buttoned down.

2. Is your team complete? 

Many startups and small businesses have a small team, and that’s ok! The number of people working for your company isn’t as important as the quality of your coworkers. If you have your team set, make sure you can stand behind each and every one of them. If you’re still looking, consider filling the roles with professionals before approaching investors. Anyone who has successfully participated in a prior business launch will be an asset to you and a plus to investors. 

3. Have you found the right business investor? 

You might be thinking “I want to find an investor for my business at all costs.” But, while it can be exciting to find an investor for your company, consider whether they’re the best fit before proceeding. Venture capitalists and angel investors are looking for baseline company qualities and financials for their needs, and you should have expectations for them in return. Ask about their other projects and get references from people they’ve worked with in the past. Consider compiling a list of required qualities and terms for your partnership with an investor before finding one so that you can better communicate your needs.

While you don’t want investors who are going to micromanage their investment, ideally your investors will also be seasoned professionals who know your industry and can help guide to you maximize growth in the next stage of your business. 

4. Is your contact list updated?

In any business venture, a current list of contacts is both highly valuable and necessary. Depending on the field your company occupies, you’ll want to create an organized list of anyone and everyone involved in your business. From potential clients, to employees, to maintenance workers to investors and beyond, creating a contact list shows investors that you take your business and your clients seriously. Consider using a contact organization service like Salesforce or Pipedrive, which allows you to categorize contacts with ease. 

5. Have you decided on a mission statement? 

A good way to impress an investor is to lead with a strong mission statement. Mission statements serve as a summary of your goals and core company values. Creating a mission statement before meeting with investors also gives you the opportunity to organize your vision for the company. To get started, define your long term goals, how you plan to get there and what makes you different from your competitors. 

6. Are you planning to move your operation?

A lot of startups have humble beginnings, so location can be a destination—Apple did start out of a garage after all. If you’re currently looking to move your operation to a different location, be clear about this with investors. You’ll show expertise and foresight about the market in which you’re pursuing business by doing so. 

7. Is the market ready for your company?

You could have the most innovative product or service, but find yourself operating in the wrong market. To investors, this is a red flag. Consider the market you’re about to enter, including existing products and services, and ask yourself why your company will succeed. Is there enough demand to make your company desirable over others? Investors will want to know the answer, so make sure you have a planned response.

8. Does your marketing fit your company?

Branding and marketing is a staple when it comes to starting a business. Investors and competitors alike should be able to take one look at your company font and logo and get a sense of what your business offers. Though branding and image might be at the bottom of your priority list, it matters. If you need to hire a specialist to get your company’s logo sparkling, consider it a valid business expense. 

You should also have put careful consideration into your marketing strategy. Make sure you’re personalizing your approach in a way that fits your customers and niche. This is one of the first aspects of your business an investor will notice, so it’s important to take a thoughtful approach to the marketing.

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