Raising start-up funds for a new business can be challenging enough, so don’t compound the difficulty by not having a clear understanding of exactly what you need and want for your endeavor. This means asking yourself hard questions that you’ll definitely need answers to before a check is written.
Potential investors will want to know your answers as well, and rather than head into the process unprepared, let’s help make you more ready by listing at least some of the important questions you’ll want to have answers to.
7 Questions that need answers for start-up funding
How much capital do you need? - Having a clear idea about how much capital you need obviously simplifies the task a great deal. Assess what your costs are going to be, and understand that it always costs more!
What are you willing to give for this money? - There will be a price to pay, and you need to know ahead of time what you’re comfortable giving up. Whether that’s an equity position, or a simple return on investment, know your numbers and stick to them.
When does it get repaid? - What is the time frame for this initial investment? Have you got enough time to pay the capital investment back, using either a fixed repayment plan, when you sell the company, or more flexible options.
What’s the growth plan? - This is a significant factor your investors and you should both be interested in. Along with the growth plan a time frame is expected.
What are you putting up? - What is your financial stake in this? Knowing what you’ve got on the line can be reassuring for investors who you are asking to pony up a lot more.
How much input do investors get? - It needs to be made clear at the outset exactly how much guidance or “help” you want from investors. Best to avoid these kinds of problems right from the get-go.
Who buys and uses your product or service? - Who is the ideal customer, and how do you intend to market to them? Having a firm grip on your eventual buyers calms many investment fears!
Please do me a favor by sharing this post with your friends. You can also let me know what you think of my post by leaving me a comment on my Facebook page and about other topics you would like me to cover.