Top10Financing.com
info@top10financing.com

Got Questions about Financing?

Here's the best advice for small business owners, entrepreneurs and real estate investors.

Yes, Sign Me Up Now!!!
  • HOME
  • Our Blog
  • Starting a Business?
  • 6 Steps to Business Financing
  • Step 1: Take a Personal Inventory
  • Step 2: Know Your Credit Scores
    • Credit Repair
  • Step 3: Build Business Credit
  • Step 4: Prepare a Business Plan
    • Business Plans
  • Step 5: Identify the Financing Options
  • Step 6: Make the Pitch to the Right Financing Source
  • Business Financing Consultations
  • Take the Business Financing Quiz!!

Top 5 Tips for Raising Equity Capital

9/13/2011

7 Comments

 
In my experience working with business owners and entrepreneurs, those who had the greatest success at raising equity capital practiced these five strategies. So, whether you are trying to raise $20,000 from friends and family or $5 million from a venture capital firm, follow these tips.

#1: Understand Business Cash Flow Completely. Not only must the business executive have a strong grasp of the marketing and operational aspects of their company, but they must also fully understand how their company generates cash flow, i.e., how the company actually makes money. Investors want to know with certainty that the company leaders can take the capital invested and turn that into solid revenues. Understanding pricing strategies, fixed and variable expenses, margins, account receivables aging, administrative costs, taxation and depreciation is paramount to being able to communicate how cash is generated in a company.

#2: Prepare an Accurate Funding Request. A concise investment offering spells out exactly how much money is being requested and how the funds will be used. Providing this information as a synopsis in the executive summary is key, but also having a detailed breakdown of the funding request and use of proceeds helps investors to quickly analyze the project but also to evaluate the complete  details if they have interest. Forecasts with specific revenue projections and  cost estimates are crucial and are best developed when based on factual  information from the company’s historical financials.

#3: Execute Professional Presentation Skills. Polished, prepared, and professional presentations to investor prospects will yield higher success rates  than pitching the project on the fly. One of the key aspects to a stellar presentation is brevity. Investors are seeing hundreds of project ideas to fund a single one, so a presentation that is compelling and to the point, presented with enthusiasm, is a must in order to stand out in the crowd. If the company executives are not prepared to present the proposal in a polished succinct manner, then either invest in coaching or public speaking lesson, or hire business executives that have the skills to do so.

#4: Target Only the Right Investor Audience. Before preparing an investment offering, thoroughly research who might be the prospective investors.  Pre-qualifying the investors to make certain that only appropriate funding sources are being pitched will help streamline the process and save precious  time. Determine the investor’s track record for funding companies and projects  such as yours. Find out what stage of funding they provide (proof of concept,  pre-production, scale-up, etc.) Each investor likely has a geographical region  and market sector that they prefer. Narrow down the list of prospective  investors before the investment offering is distributed so that only the right  investors receive the prospectus.

#5: Be Realistic About the Time it Takes to Get Funding. Realistically, it will likely take as much as 1000 man-hours spread over several  months for the capital-raising process. This time will be spent perfecting a  business plan and investment offering, developing a targeted list of prospective  investors, contacting the list and pitching the project, and finally,  negotiating the deal. In some cases, business owners have identified nearly 200  prospective qualified investors, presented the project to 50 of those, to  potentially get offers from 5 investors who received the full-blown presentation.  It’s easy to see how the time spent can add up.

7 Comments
mcx tips link
9/29/2011 07:33:17 pm

Thank you for posting the great content…I was looking for something like this…I found it quiet interesting, hopefully you will keep posting such blogs….Keep sharing

Reply
mcx tips link
10/5/2011 06:11:20 pm

Hi, you explained the topic very well. The contents has provided meaningful information thanks for sharing info

Reply
mcx tips link
10/14/2011 05:42:22 pm

 This is a great inspiring article. I am pretty much pleased with your good work. You put really very helpful information. Keep it up. Keep blogging. Looking to reading your next post.

Reply
free commodity tips link
12/12/2011 07:25:37 pm

I will keep it in mind, thanks for sharing the information keep updating, looking forward for more posts. Thanks

Reply
free commodity tips link
12/12/2011 07:27:54 pm

Thanks for sharing this with us. I found it informative and interesting. Looking forward for more updates..

Reply
equity tips link
9/12/2012 04:44:01 pm

Good job...all the content are really very informative..when i am reading your blog i am very pleased to see this blog...This is the perfect blog for anyone who wants to know about this topic. The article is nice

Reply
North Vancouver realtors link
9/13/2012 05:35:51 pm

I've been looking for information like this for quite a while and found your blog post. Thanks so much for the information.

Reply

Your comment will be posted after it is approved.


Leave a Reply.

    Top10Financing News -Here is our blog:

    Archives

    February 2016
    January 2016
    December 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    September 2014
    July 2014
    October 2013
    September 2013
    July 2013
    May 2013
    March 2013
    December 2012
    November 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011


    Affiliate Disclosure: In some posts we may recommend products or services for which we receive compensation.  However, we only recommend products that we've either personally checked out or that come from people we know and trust. When you purchase something from a link in this blog, we may receive compensation, but the price to you is the same regardless of whether we are compensated.  Our first priority is to provide information and resources to help you  in your endeavors  (affiliate or otherwise).  Affiliate compensation helps to offset the costs associated with maintaining a high quality blog.
Affiliate Disclosure: On this website we may recommend products or services for which we receive compensation.  However, we only recommend products or services that we've either personally checked out or that come from people we know and trust. When you purchase something from a link, we may receive compensation, but the price to you is the same regardless of whether we are compensated.  Our first priority is to provide information and resources  (affiliate or otherwise) to help you in your business endeavors.  Affiliate compensation helps to offset the costs associated with delivering high quality information to you.
                              Copyright © 2011-2016, Asset Financing Group, Inc., All Rights Reserved
Photo used under Creative Commons from frankieleon