Are You Sure Your Startup Is Ready To Receive Investment?
When raising money for a new business venture, you have to be ready to receive money. I.e., investors need to know that if they give you the $1,000,000 you're asking for that you are ready to spend it tomorrow, and I mean tomorrow.
You're probably wondering what this post is referring to, i.e., of course you can spend the money tomorrow, who isn't able to spend money, right.
The point I'm making is, are you ready to spend the money on the things that are going to accelerate your progress and company growth? I.e., above and beyond a nicer phone and faster computer.
For you to answer this question, the first test is can you complete your Bizignite plan in an hour or less?
(For those of you not familiar with the Bizignite plan, it's a free tool that asks you the 11 questions an investor is looking to have answered in a clear and concise manor that a 30+ page narrative plan does not do well.)
After completing the Bizignite test, you need to formulate a spending strategy and budget with timelines for expenditure.
If you don't have these items in place this blog may have answered your question "why aren't investors investing?".
What we do with our clients is create an 18 month budget of expenditures, showing the monthly burn rate (expenditures each month). Not only does this show that you've thought about how you're going to use the money to accelerate progress, but it helps the investor with their decision making progress on how they're going to release funds.
These are essential components in fund raising.