How to Raise Capital for Your Small Business

raising capital

Many entrepreneurs are successful in starting small companies but growing that business is an even more challenging endeavour.  Every small business is different and there are many ways to raise capital for your business.  Whatever path you choose, raising capital requires significant preparation.  Anyone who is going to give you money is going to want to see a return on investment. It’s your job to prove you can make that happen. Usually this begins with a thorough presentation of your growth strategy.

When approaching investors it is essential to have clearly articulated goals and a well thought out strategy for how to achieve them.  You should also have a profound understanding of risks and challenges which may hinder your growth and expansion plans.  By being aware of risks, not only will you be well prepared, you will also significantly reduce investor concerns about how well you have thought things through.  Other factors which are key to any expansion discussion are how your business differentiates itself from others in your industry.  Having a niche and demonstrating the potential customer base of that niche will go a long way towards proving there is a scalable, feasible growth model.

As well, investors often attribute a significant portion of their belief in a business to the quality and capability of the team.  Business owners are often too modest about their experience and / or that of their team.  They provide simple one sentence statements about having 10 or more years of experience as proof of their capabilities.  In reality, investors are like everyone else – they want to see tangible proof.  Speak to past projects or organizations you and your team have been involved with and relate them to your growth strategy.  Such points go a long way towards demonstrating that you have the ability and the team to make it all happen.

You should also have a thorough understanding of your business financials and a good sense of the current and future value of your company. If you’re raising equity capital this is especially important to you and any potential investors. They want to know that they can make a return on their investment and you want to ensure you are raising capital based upon a fair market valuation of your company.  With each discussion, be sure to conclude by leaving behind presentation materials. It should summarize everything you’ve told them in your presentation. Your knowledge, confidence and enthusiasm should come across as strongly in your leave behind materials as it does in person.

Finally, if there is ever a time to be choosey it is when picking a potential investing partner.  The right partner will not only share in the financial risk, but will also share in your vision for the enterprise and the end objectives.  Investors should see your success as their success and your growth as their growth.  If you find the right investor, not only will you raise capital, you will also gain valuable partners who are just as vested in your company’s success as you.

Don’t forget that small business insurance is an important part of your growth, contact us for more information.

An Important Update About Bullfrog Insurance
 

Please be aware that due to a change in our operations, Bullfrog Insurance has made the difficult decision to start winding down our business. This means we are no longer accepting new clients.
 

Are you an existing Bullfrog Insurance client? Rest assured that your coverage remains valid, and you’ll continue to be protected up until your policy expiry date. Watch your inbox for more details from our team.