For private investors considering funding a business, the question 'what got you started?' is one of the most important and insightful that they could ask. It will give them a vision of your motivations, and it will tell them a little more about who you are as a person.
So here is our review of the top five reasons given to private investors when they asked this question:
This answer comes in at number five because the most commonly held fallacy about entrepreneurial life is that owning your own business will somehow offer you more freedom. If you are one of the many who believe this to be true then I'm sorry to burst your bubble but it's not. Then again, Santa's not real and the Easter Bunny was just made up by an evil chocolate corporation.
Your nine to five gives you five to nine off. Ok, you might spend most of this time commuting, eating and sleeping, but you should really consider this to be a luxury of an employed existence. When you launch your own business you'll more than likely be required to work evenings, weekends, bank holidays, birthdays and anniversaries.
You can assume that all private investors will know that the life of an entrepreneur is far from easy, and that any suggestion of freedom is likely to indicate inexperience or a lack of drive, neither of which should you be advertising if you're hoping for their financial support.
With the success of programmes like The Apprentice and Dragons' Den, a select few successful entrepreneurs have achieved the status of celebrities. Just as actors dream of the fame they would achieve from landing the starring role in a blockbuster movie, there are some out there who crave the corporate limelight.
Status and power have always had massive appeal, but is this the answer private investors hope to hear when they ask the question? Well, more publicity means more sales and private investors would certainly be happy if this translates into a better return on their investment. But if you give this as the fundamental reason for launching your business, most private investors will have to take into consideration the miniscule odds of this happening and base their investment decision on this accordingly. My opinion is that they will feel there are far more practical motivators than fame and position they'd be looking for in the person responsible for making their investment profitable.
When private investors hear that your motivation is a calling, they could go one of two ways. Some will undoubtedly see this as worrying, because missions can be based on nothing more than blind faith. However, others might see this as a sign of self-belief that will carry an entrepreneur through knockbacks and out the other side stronger.
So if this is the reason you decide to give to a room full of private investors, make sure that it is backed-up with knowledge, experience and drive to push a business towards the goals you are setting for yourself.
So you expected that this would be number one, did you? Well, it was a close run thing. Money is a massive motivator for an entrepreneur. Dreams of wealth are what attract people to start their own businesses; chasing those daily, weekly or monthly targets keeps you on your toes and gives you constant new goals to shoot for, and the desire to develop and grow a business to reap the rich financial rewards is strong.
Whether it's for the salary, the dividends or the exit strategy, it's the dream that your inspiration will end up paying the big bucks that keeps people going day and night to make a business successful.
Most private investors will probably like this answer, as long as it is not coupled with arrogance or delusion. Some might still feel that there should be something more to your motivations than money alone, so it's important to show that if this is your primary reason that there are numerous others that keep you getting up early every morning and staying in the office until late at night.
A surprise entry at number one maybe, but certainly deserving of the position. Passion is the single most important character trait of any entrepreneur. It's passion that keeps you going against all the odds, it's passion that allows you to stay positive even when things look their blackest, and it's passion that has helped more millionaires achieve their professional and financial goals than any other single motivator.
Passion can come in many forms. It might be for the love of the business world, the sector you're in, the hobby that you've developed into a business, for inventing gadgets that everyone will find wonderful, for helping your fellow man, or for success.
Private investors will of course want to see evidence of your passion. It's a very easy thing to state, but far more difficult to prove. Always go armed with examples of where your passion has taken you and the successes it has won you whenever you attend a funding meeting.
There is no right or wrong reason for starting a business (unless it's for the freedom of course), and in most cases private investors will want to see that the person asking them for money has a combination of these motivators pushing them forward.
Remember your reasons for launching a business - they will encourage you to do better, pick you up when you're pushed down, and allow you to be proud of what you have achieved.