At some point in every entrepreneur’s career, there will come the time when they need to secure funding. However, getting the funding you need is no easy feat. The startup game is a risky business to get into, and a lot of that is because entrepreneurs are competing with a lot of competition for a limited amount of investment. As such, it is your responsibility to demonstrate why your idea is a great idea to invest in; it is up to you to convince them to open their wallet.
But in order to do this successfully, you are going to need to understand what the common mistakes are so that you can avoid these mistakes when you’re finally ready to secure some cash.
You Have To Understand Your Financial Position
This is the single biggest area of mistakes suffered by new entrepreneurs. So eager to prove themselves – and show off their great idea – they make huge mistakes regarding their financial position. Sometimes they haven’t done basic things, such as they haven’t secured loans to improve credit, personal credit, the credit that investors will scrutinize. Other times they will make completely unrealistic valuations of their company in order to grab attention. But anything that demonstrates you have misunderstood your financial situation is going to backfire massively. The reason for this is it shows a lack of understanding, a lack of maturity, a lack of leadership and a lack of ability. So always know your finances and always be truthful about them.
Surround Yourself With A Great Team
No successful business leader or entrepreneur has ever found success purely on their own. Apple, Google, Microsoft; every single one of these was started by a team, and that is a valuable lesson to learn. As such, it is imperative that you surround yourself with a group of people that will bring value to your company. An investor is much more likely to invest in a team of people than one person, and that is because the risk is massively reduced. They can be more confident in a startup that has a financial controller, a sales director, a design specialist and a user-experience manager than they can be in a single person that has an idea.
Know Your Place In The Market
It is such a simple thing to understand, and yet one of the big bear snares that catch so many newbies out. If you are starting a business – whether it offers a product or service – you have to know exactly where it is going to fit in the marketplace. Anyone that is investing in a startup is going to want to know about your go-to-market strategy, and that starts with knowing where you are going to launch and the demographic that is going to need you. This strategy is important to an investor because it is the very thing that gives you a competitive advantage over the other companies that operate in this sector, this niche, this industry. So know who you are, where you fit and how you are going to grow, and know all the little details too.
