2014 is not like 2007 in the capital venture investment world. No longer will a soft business plan, nonexistent client base, and prototype enable you to receive large capital seed funding for your business. In order to entice initial investors to seed your startup company, more is being demanded and expected. Those first critical dollars require critical analysis and a smart plan for your first funding presentations in order to be taken seriously, whether it is to friends, family or crowd funding sources so popular at present.
One of the most important parts of any seed funding presentation should include an advanced business plan that shows your intended way forward. This should not be a slim document that fails to address the ways in which your product or service will reach intended revenue targets. This business plan should be professionally completed, including market research for your product and competitors, proper marketing plans that provide action targets and time frames, operational plans that outline labor or production requirements, and most importantly established sales targets with intended action plans to achieve those targets. Even if presenting your business plan to friends and family, it is important for your plan to be professionally researched so that it can effectively outline the intended revenue projections. Startups can be a big risk, so the more prepared you are, the more funding you may receive.
Networking & Activity
After the baseline research and planning has been accomplished, what is the next step in acquiring seed funding? This part of the seed funding process is often referred to as the sales pitch, your pitch deck or in larger corporate or sales circles, your networking ability and total selling activity. Think of seed funding as your first sale. You will need to sell your potential friends and family or other initial investors on your idea, product or service. In order to sell effectively you need to develop a consistent process of networking and producing contact activity, besides having a great presentation (more on that below). This is generally where the law of averages comes into play. If you expect to have five investors then consider approaching an initial batch of 100 potential candidates. Top salespeople can close up to 20% of their deals, yet being a top professional salesperson takes time and experience. Making 100 contacts should equate to 20 presentations and a potential for five real investors. If you are not willing to do some initial legwork your idea may never get off the ground. This is where most entrepreneurs need help from other small business consulting professionals to coach and mentor their activity levels and provide great networking ideas.
Before even attempting a presentation of your product or service before potential investors, it should be vetted by professional consultants or preliminary investors. Taking your pitch deck and presenting to a small business consultant, can provide insightful and objective criticisms from a third-party. In early presentations be mindful of potential investor questions that were unexpected and be able to provide answers in following presentations. The learning process for presenting a new idea and gaining traction takes time and effort.
Learning the ins and outs of seed funding for businesses can be a tall task for business owners that also need to get their business off the ground and producing revenue. In order to speed up the process; hiring a funding consultant professional should be considered in order to achieve seed funding in a highly competitive marketplace for investment. A small business consulting firm should be able to provide advanced business plans, expert coaching for presentations and be a general resource for business startups and funding initiatives.