Securing the right investor for every stage of your business

Sep 5, 2018 Blog  Investor , Startup

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For many new entrepreneurs, getting the right investor/s to get your business off the ground is often the hardest part.  This usually means asking people to place their money and trust in you and your business – this is not an easy task.  Getting the right investors at specific points in the lifecycle of your business can make or brake your journey.

It helps to understand the different stages that a startup will typically go through and then match the right investor to every stage.

At the founding/startup phase, entrepreneurs usually turn to family and friends – this is typically because there is no business entity at this stage and people are asked to put their money behind a person.

At the seed stage, the business is likely to go through a lot of change as it is still in ‘discovery mode’ and you need to look for investors outside the ‘friends and family’ group.  These investors will need to be flexible and patience and they will probably have to tolerate a lot of change while the business finds it feet.

In the post seed phase or ‘growth before break even’ stage, you can target traditional venture capitalists who can bring both their experience and networks to the table to ensure more structure to the business.  At this stage, your business needs both capital and high level expertise to move to the next level.

The final (and hopefully) ‘post break even’ stage, will see you having discussions with high level venture capital investors with a solid track record of having propelled them onto the global stage.

At every stage in your lifecycle, and with every investor you approach, you have to ensure trust and transparency.  It is also critical that your values are aligned with those of your investors – they have to buy into your vision and mission.

There is no exact science to choosing the right investors, but with these basic guidelines, as well as your intuition, your business should be on the right track.

For the full article on Ventureburn, click here.

Image: Mike Cohen via Flickr (CC 2.0resized)

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