Guest blog: How do you know when your business is ready for funding?

"The first step to deciding whether you’re ‘investment ready’ is to ascertain whether your business is a good idea combined with a great execution plan.  Many people focus on the idea without considering whether or not they can actually deliver a business proposition that is commercially viable. 

As entrepreneur and investor James Caan has been quoted “One of the biggest mistakes an entrepreneur can make is getting caught up in the moment: running with your idea or opportunity and spending time and money on developing it rather than taking a step back and thinking to yourself: “Is my idea really a viable business?”

Seeking funding too early, before your business has had a chance to prove itself, can be risky and end in failed funding rounds. Investors always like to see that an entrepreneur has put their own money into their business and thus taken a risk themselves and proven their commitment to the business, so bootstrap for as long as you can using your own funds and raising investment through friends and family before turning to investors.

Whether you’re presenting to angel investors at an event or pitching on a crowdfunding platform, you really only get one shot to impress so it’s important that you and your business are fully prepared and make the most of your chance. Investors will want to know exactly where their money is going, which includes every aspect of the company, from the idea that started it all, to the management team, to expansion plans to how it’s going to make them money.

It is important to ensure that as an entrepreneur or business owner, every aspect has been carefully thought about. Are your financial forecasts realistic? Do you know your market? Have you researched enough? What is your strategy for the future? With so many points to cover, it’s easy to miss something that may seem trivial but could be a deal breaker for a potential investor, so it’s worth getting as much impartial advice about your business plan or start up idea as possible.

The world’s first integrated angel and crowdfunding platform, Angels Den, believes that anyone with a good scalable business should be able to pitch to investors. Angels Den advise and coach their entrepreneurs through the whole process and even offer complimentary business funding clinics to meet one-to-one with entrepreneurs, giving them a chance to pre-screen the business and offering the entrepreneur the chance to ask any questions about their business and the funding process.

There is a wealth of information available to entrepreneurs and SME’s and Angels Den suggests The British Library’s Business & IP Centre in London which is a fantastic free resource with every journal or publication a small business could need and an IP specialist on hand to help people navigate the resources and answer questions."

 

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