dark brown ugg boots Used Ways to Convince Investors to Put Money into Your Business
Hi I Evan Carmichael and welcome to a special video edition of Ask Evan. Today post is brought to you by American Express Canada. They have just launched a new Facebook page called Amex for Business Canada so if you liked my videos in the past, please check out their page and let me know what you think.
Alright, so today I going to answer a question from one of my readers Vinit who wrote in asking:
The problem for me is that I am an undergraduate and my total experience is approx. 24 months. The biggest problem for me is to make a business plan for investors and then convince them about my capability. Have a great day and thanks again for the information. Most business plans get rejected right on the spot and you don get a chance to even come in and present your case.
The plans might have been poorly written, the idea might not have been interesting enough, or we had serious doubts about the entrepreneur capability of being able to make this a success.
One of the best ways to stand out from everyone else is to achieve sales. Just get one person to buy from you and show investors that people are willing to actually pay you for what you do and you separate yourself from 90% of the other entrepreneurs who are pitching their ideas.
You don have to be making a lot of money but proof that someone is willing to buy your products or services is a great first step to establishing credibility with potential investors.
2) Build an Advisory Board
After the executive summary, one of the first places an investor will turn to in your business plan is your management team. They want to know who they are potentially investing in and what kind of experience you have.
The less experience you and your team have, the harder it will be to convince investors to give you money.
One way around this is to build an advisory board. Talk to people who do have experience and ask them if they be willing to be your advisors. They not liable like they would be if they were on your Board of Directors and the compensation for their advice is up to you. Often advisors are willing to join because they are excited about the future of your company and they don ask for any immediate compensation.
Being able to show that you have a solid team of advisors will go a long way to boosting your credibility and increase the chances of you getting the money you looking for.
3) Pass the Grandmother Test
There an expression within the venture capital industry around if your executive summary and business plan passes the grandmother test. In other words,
would your grandmother understand the opportunity if you gave your business plan to her?
Remember that most investors are generalists. They know a little bit about your industry but they won know it as well as you do. Too many entrepreneurs fill their business plans with jargon, complex industry terms and tech speak, so much so that investors have a hard time understanding what their companies are all about.
If an investor can read your executive summary once and immediately understand what the opportunity is, then your business plan is going straight into the garbage and they moving on to the next opportunity. Make sure you show your plan to people who do not know your market and see if they can understand it before you start pitching investors. Pass the grandmother test!I hope that helps Vinit! Remember if you want to increase your credibility with investors and improve the chances of them investing in your business:
Hi Evan great video, simple and to the point.
I recently had a business and investment opportunity that I wanted to raise capital for. Needed approximately $1.5M to get it off the ground. Wrote the business plan and a pretty snazzy powerpoint presentation. I wish I seen this video before I started. Now I have to go back and re write parts of it.
Still a great learning experience going through the process. Especially the Grandmother test. There is definately a good opportunity for that lazy money from retirees looking to invest into ventures that produce good income returns.
Great blog and has given me lots of ideas for my own. Thank you.
I have an invention which Davision Corp. is helping me with. Right now it is in the engineering stage. Iam going to have the Davision Corp. Make out a check to who ever invest in the project and they will make out a check to me too. The project is a toy and it also will be A carnival ride which people will really enjoy. The Davision Corp. is targeting Huntar Corp. to produce and market the toy world wide. The Davision Corp will Take 10% of every 100000.00 dollars which comes in . and the rest will go to who ever invest and to me. I am trying to get my family off from social securty and supplement social security benifits. Who ever invest will make a lot of money every month.