How to attract investors and guarantee your own success
A few days ago, a group of wealthy, corporate investors flew halfway across the globe to where I am, for the sole purpose of asking to inject several millions of dollars into one of the many companies I own.
It is always flattering and somewhat satisfying, to see powerful, wealthy corporations rushing in to invest into a company you own and control; an idea you envisioned.
You may wonder why this is so. Why people of stature and affluence race and fight just for the opportunity to invest in one of my companies.
It is always flattering and somewhat satisfying, to see powerful, wealthy corporations rushing in to invest into a company you own and control; an idea you envisioned.
You may wonder why this is so. Why people of stature and affluence race and fight just for the opportunity to invest in one of my companies.
Today, I want to share a secret with you. Regarding the concurrent successes of my businesses and the reason why people from Europe, America, Asia, and Australia contest for the opportunity to invest in my ideas.
There are several businesses, that are born out of noble and sensible ideas, but they can’t get funding. They can’t get the needed stimulus to jump start operations, and even when they do, the owner is not able to secure a financial partner; even if the idea is spectacular, inventive and genius.
Much of that has to do with the actual idea. Are you able to express your idea passionately, ornately, and in a manner, that can attract investors?
The secret mentioned above is called, "an elaborate business plan". Notice, i did not just say a business plan, but rather one that is elaborate.
Every business which has an elaborate, sensible, and honest business plan will attract investors without any effort from the owner to convince them.
You might ask, what constitutes an elaborate business plan?
_I will try and help you in brief_
Much of that has to do with the actual idea. Are you able to express your idea passionately, ornately, and in a manner, that can attract investors?
The secret mentioned above is called, "an elaborate business plan". Notice, i did not just say a business plan, but rather one that is elaborate.
Every business which has an elaborate, sensible, and honest business plan will attract investors without any effort from the owner to convince them.
You might ask, what constitutes an elaborate business plan?
_I will try and help you in brief_
An elaborate business plan must have the following:
1. Accurate Financial Accounting
I cannot overstate the significance of this. Your business plan must be accurate, honest, and follow a clear financial plan. The plan should show which aspects need funding, how much, and for what reason. It must show projected cash flows for at least 5 years. It must show clear avenues for audit checks, and revenue reporting.
The accounting aspect of the plan is the mathematics of the plan. Investors are thorough with figures. You need to be twice as thorough.
I cannot overstate the significance of this. Your business plan must be accurate, honest, and follow a clear financial plan. The plan should show which aspects need funding, how much, and for what reason. It must show projected cash flows for at least 5 years. It must show clear avenues for audit checks, and revenue reporting.
The accounting aspect of the plan is the mathematics of the plan. Investors are thorough with figures. You need to be twice as thorough.
2. Legal Frameworks
The legal framework of the business is among the most critical necessities. Your financial reports can indicate that your business will be transparent and make money, but an investor still has a burning question – will his money be safe? Will he be able to get it back? Are there any legally binding commitments which are guaranteed by law, that warrant that the investor’s money is safe?
Besides the legal frameworks that protect and allow your operational capacity, you should even consider a memorandum of understanding. Go out of your way to research all legal provisions that will protect your investor.
Contrary to popular belief, the duty to protect investor funds is not the burden of the investor. You should work hard to make sure you avail this information, and prove to the investor that his / her / their money is legally safe. This is an act of good faith that demonstrates that you respect the law, and that you are faithfully committed to protecting your investor.
You should even go out of your way, with the MOU, to make it clear that you are liable and accountable to your investor. Personally, I would advise that you even offer the investor assimilated ownership of the business for the entire period that you are indebted to them.
Most people believe in this case, an offer of 50% ownership. I say, go further than that, give them even an 80% ownership. This means you will be showing the investor that you are also willing to lose your business. That way they will not feel scared of losing their own money. In other words, what I am saying is, make your business the collateral for the investment.
Investor confidence is just as important as figures. These two things determine whether you are shunned or courted.
The legal framework of the business is among the most critical necessities. Your financial reports can indicate that your business will be transparent and make money, but an investor still has a burning question – will his money be safe? Will he be able to get it back? Are there any legally binding commitments which are guaranteed by law, that warrant that the investor’s money is safe?
Besides the legal frameworks that protect and allow your operational capacity, you should even consider a memorandum of understanding. Go out of your way to research all legal provisions that will protect your investor.
Contrary to popular belief, the duty to protect investor funds is not the burden of the investor. You should work hard to make sure you avail this information, and prove to the investor that his / her / their money is legally safe. This is an act of good faith that demonstrates that you respect the law, and that you are faithfully committed to protecting your investor.
You should even go out of your way, with the MOU, to make it clear that you are liable and accountable to your investor. Personally, I would advise that you even offer the investor assimilated ownership of the business for the entire period that you are indebted to them.
Most people believe in this case, an offer of 50% ownership. I say, go further than that, give them even an 80% ownership. This means you will be showing the investor that you are also willing to lose your business. That way they will not feel scared of losing their own money. In other words, what I am saying is, make your business the collateral for the investment.
Investor confidence is just as important as figures. These two things determine whether you are shunned or courted.
3. Feasibility studies
I mentioned earlier that brilliant ideas are sacrosanct, but you must know that potential can be deceiving. An idea can appear brilliant in your head, and you can speculate with figures, and even provide the legal framework that gives investor confidence, but the last thing which will determine your fate is this – is the business feasible?
Conduct a full feasibility study, an honest one for that matter. Research about similar business ideas, operational businesses in the same field. Check the market forces, Historical, and contemporary ones too.
You should even travel, and record all this information. Make sure that the business is not successful in your own head alone, but it is also practically possible to succeed. You will discover so many things on the ground.
Don’t make investment your key aim. Furnish your own idea, and polish it. Make sure your idea is practical, realistic and above all, it is feasible.
It was amazing, hosting the entourage of investors from a stable economy like Sweden. I did not call them, I did not invite them. My company’s profile, and its business plan did the talking. Once they saw it, they were eager to come in.
I mentioned earlier that brilliant ideas are sacrosanct, but you must know that potential can be deceiving. An idea can appear brilliant in your head, and you can speculate with figures, and even provide the legal framework that gives investor confidence, but the last thing which will determine your fate is this – is the business feasible?
Conduct a full feasibility study, an honest one for that matter. Research about similar business ideas, operational businesses in the same field. Check the market forces, Historical, and contemporary ones too.
You should even travel, and record all this information. Make sure that the business is not successful in your own head alone, but it is also practically possible to succeed. You will discover so many things on the ground.
Don’t make investment your key aim. Furnish your own idea, and polish it. Make sure your idea is practical, realistic and above all, it is feasible.
It was amazing, hosting the entourage of investors from a stable economy like Sweden. I did not call them, I did not invite them. My company’s profile, and its business plan did the talking. Once they saw it, they were eager to come in.
©Proph. Shepherd Bushiri
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