You are done with developing your idea and getting it into the market? Good for you! But growing your business into something sustainable is a whole different race. A race that will need gasoline. We talked to Ira Hayes, the Head of Strategic Development Initiatives, Ty Aloe, Director of Project Management, and Fred Cary, the CEO of IdeaPros, why the need for capital can never stop.
Plan On Time
Raising the proper amount of capital is vital not only to get your idea off the ground but to start building your business. Once you launch then the real marathon starts. The funds you need to go above and beyond the personal capital, you might have used to get things started. Planning is crucial to launching your product or app.
Understanding how much your dollar will be worth can help you understand how much money you need to raise. It is also something investors will want to know, as they will look at the financials and not the idea. They see a lot of great ideas, but it is up to you to bring it to market. You need to be able to paint that vision for them.
When you have limited resources, you can launch without money or a lot of money, but it’s a slow-growing process. The way to accelerate that process is to go out and get the capital.
“The less you need money, the more it is available to you.” – Ira Hayes
Get Yourself Out There
“You have to show up constantly. This is true for dating, fishing, and raising capital.” – Ira Hayes
You might not catch it every time, but you need to keep your chin up, be positive about it, and keep refining your pitch and your offer. Get used to hearing, “NO”. Practice your pitch and adjust it to different occasions. Remember that your goal is to get that second conversation. Don’t try to answer everything, and don’t say you have the perfect product. If you have the ideal solution, why do you need investment? They are looking to invest in your growth potential, not in the product per se.
“You hear a hundred NOs until you get that first YES.” – Ira Hayes
Show the investors you are committed to what you are going to do. A lot of people are willing to start their idea, but very few are ready to finish it.
Know Who To Ask
There are specific places to go for certain types of capital. You should understand what kind of money you are looking for. In the initial stage, you will tap your friends and family who will invest in you because they know who you are. They can help you get a viable product to market. This is a seed approach, a financial mechanism that gets you through launch and initial marketing.
Once you are close to being ready to launch, you will need a new round of investment. At an early stage, there are different ways to fund your business from WeFunder to crowdfunding and angel networks. You are trying to get growth-stage capital, and it is good to ask yourself, ”how much will you spend on marketing, operations, building, and maintaining the product?”
With a little bit of traction, more eyes turn to your business, and this brings more investors. Most investors don’t want to be the only person on the rowboat. Matching funds can be a handy mechanism here: if you already have someone investing $250,000 then you can more easily find someone to match that amount and close the round at $500,000.
“People are your direct market. They’re great to have because they are not only a money piece but a validation piece too.” – Ty Aloe
When you approach an angel investor, you can show them your users who are willing to put the money before your product exists because they want to see some traction. The final stage would be talking to Venture Capitalists (VCs) who are looking strictly at your financials. They are investing money in money, and want to know the value of their dollar.
Don’t Sell Yourself Short
Asking for a substantial amount of money can make you nervous, but that doesn’t mean you should ask for pennies to avoid the risk. The investors are ready to risk their money. They want to put enough to make your company viable and more secure to pay the people your work with and yourself a decent salary.
“It’s important to them that your idea is protected by you working on it.” – Ty Aloe
Also, it takes the same amount of paperwork for raising $500,000 and one and a half million. Remember, these groups invest first in people and then in the process and product. Your willingness to work hard is much more relevant to an investor than the final product.
“Be committed. If you’re not successful, it’s not your product, it is you.” – Fred Cary
The “Idea Pros” at IdeaPros have the resources, experience, and tools to help you at this step or any step in the entrepreneurial journey.
We partner with entrepreneurs at any stage and who are ready to invest their ideas. Apply for an interview and let’s explore partnering together.