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business acumen
angel investors
holy grail
start ups
pie in the sky
income stream
raising money
ups
Capital Raising Tips
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Raising money for your business, whether start-up, turn around or a real estate project, will go far more smoothly if you follow this advice: Plan, plan and then plan. Writing a cogent, executable business plan will put you miles in front of the millions of other great ideas that are knocking on many of the same doors that you will. Investors get hundreds of deals a day, and pretty prose and pictures will not get your project funded. Solid numbers, facts and examples just might.

If you are not a writer, hire one. Nothing turns off well educated and wealthy investors more than terrible English, spelling and syntax. Your words are your ticket to money. If your words make you sound semi-literate, you won't get money, it's as simple as that.

It is also essential that you have solid facts to back up your Pro-forma. Pie in the sky projections or loose valuations will turn investors off. Be realistic, and remember that these people have probably made their money through hard work excellent business acumen. Clearly describe who your market is, what your entree to that market is, what sort of sales numbers can be reasonably expected.

So many start-ups believe that their idea is the Holy Grail, and put ridiculous valuations on a concept that is not firmly footed in reality. If you have no sales, you have no value. You cannot expect an investor to buy-in to your idea unless you are willing to give up a huge portion of the upside. Angel investors generally demand control of the business (at least 51%) and also usually take a management position in the company. This ensures that their money is relatively safe, as they are steering the ship.

NEVER build in your salary. No one is going to pay your freight to make your business plan work. Always have some income stream to sustain you until you are profitable, and THEN take a salary. I read business plans every day from start-up companies that have a board of directors! I hope that my reader will see the humour in this.

Remember that having a strong business plan and marketing strategy will be essential to the success of your fund raise. If you have already called on family and friends to no avail, get to work on your Business Plan, and create a solid marketing strategy that will attract real capital to your enterprise. Good Luck.


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