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How to successfully get the first round of funding for your business



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How to successfully get the first round of funding for your business

One of the main reasons a business fails is because it runs out of money too quick.  It's definitely an uphill battle when you decide to get into business for yourself, but it's not impossible.  If you plan to get huge, you will likely need to learn how to attract investors and also how to get them to invest.  Learning how to obtain funding is a skill of it's own, and you need to figure out how to do it.

In this discussion I'll go over how to successfully get the first round of funding for your business.


1. Research who you're going to be talking with
Almost all of the time an entrepreneur will forget to research the firms or people they are contacting for an investment.  Not researching who you're contacting just shows how unprepared you're going to be for your own business, and this means you will get shunned by most (or all) of the people and firms you contact.  If you're not familiar with what the firm or people do with their money, it instantly throws up a red flag for the investor and they will likely discontinue the conversation.

You need to know what the firm, or person, is interested in because that's what they invest in.  If you pitch someone an app idea and they invest in software, you're likely going to get ignored.  If you just sit down and do  a day or two of research, you will leave a better impression with the investor and have a better chance of getting the funds you need to become even more successful.


2. Figure out how to get a warm introduction
Almost all of the investment firms won't even look your way if you don't have a warm introduction or are on their radar.  If you don't know how to get a warm introduction with an investment firm, you can always hire a lawyer to do it for you.  Hiring a lawyer is one of the quickest ways to do this because they usually know someone at the investment firm within their area.

I would avoid at all costs just emailing them every day to get on their radar.  It makes you look annoying and they will eventually just block your emails.


3. Avoid the pitch, just talk normal
When you're talking to an investor, they don't really want to hear a pitch from you.  If they want to set up a meeting with you, they already know 90% of what's going on with your business.  They just want to meet up with you in person and see who you actually are and have you answer a few questions.  Investors likely have been sitting around all day hearing one pitch after another, don't you think it would be nice if they could just talk to a normal human being for a few minutes?  You would likely stand out from the crowd if you treated them like a person and not a stack of cash you're trying to obtain lol.  You'll need to build up your relationships with the investors since you likely won't get your funding on the first, second, or even third meeting.


4. Talk and have a competitive edge
Even if you are the best at what you do and your product is amazing, no one will know unless you're talking about it.  If you're the owner, you need to be the one at the front of the lines spreading the word about your amazing product or system.  If you can't talk about your product, no one will.

You will also need a competitive edge when it comes to enticing investors into opening their checkbooks.  If you're just pitching some random company that 5,000 other people have already tried, you're going to be ignored.  You need to have something that others do not, like proprietary technology, being more connected than everyone in your industry or just being the first one with the idea that is going to market.  If you have something that many others do as well, you're system can easily be replicated and that's a threat to investors.


5. Have a great story
One of the most important things you can have, is a story about your journey and product.  This will show the potential investors what you've battled through to get to the point you're at now, and that you don't intend on stopping for anything.  An investor wants to see that you're a fighter and you won't stop until your product, service or system is the best out there today.  If you can get investors to be in your cheering section, they will likely invest in you How to successfully get the first round of funding for your business



In Conclusion:
Getting on an investors radar isn't as easy as it sounds, but it's not impossible.  Hire a lawyer that works with the investment firms and you can get connected.  Don't pitch because the firms hear them all day, just be a human being talking about what you want to do.  If you can master all of what was mentioned above, you will likely get some investors in the next 12 months How to successfully get the first round of funding for your business


Remember to follow me!
https://www.seoclerks.com/user/Razzy


Thanks!

Razzy

Comments

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kgord
Some excellent suggestions. It takes money to make money, and getting a succesful pitch going is one of the things you need to work on if you want things to go your way in the business world. I just think it is one of the things you need to work toward. It is helpful to all.



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Corzhens
Most people that I know in the movie industry say that the pitching is the most important step in making a movie. That is the start of the journey especially for a film director who usually executes the pitch of the planned movie. In obtaining funding for the business, I guess you need someone who is good at it. Not anybody can do the pitch for it will just be a failure because convincing a funder is not that easy and it’s like climbing a rocky mountain, so to speak.



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keen2write
Excellent views on the matter, Yeah as kgord says takes money to make money. Kind of like can you talk the talk but also walk the walk. Me my self I own a little business online looking for some form of investors but struggling a little so I am glad you wrote a piece on this thank you.



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Pixie06
Those are some great suggestions. This reminds me of the time that I was looking for funds to start my business. It was not easy. I had to look for a professional to help me and it took some time before the bank finally accepted to grant me a loan. Some people may think that it is easy to start a business but that's not the case. There are so many procedures to follow. It requires lots of patience.



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augusta
Some very important tips there, having self-confidence is also an added advantage.It always good to approach a sponsor with confidence that you can deliver come what may.This will help the sponsor to detect that resolution in you,that his or her money will be safe because the person before him is no pushover.



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DarthHazard
Having a great story is such a good thing because it can be the exact thing that you need that can help you get that funding that you need for your business. A story about how you started your business or the struggles and difficulties that you had to go through to set up and develop your business can be exactly what investors want to hear to figure out if your business is the right business to invest in.



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Tronia
I think that getting the right funding is a real struggle for many businesses and entrepreneurs. You have to make people want to invest into you and take a chance. I believe that the way you present yourself is crucial and that you should definitely practice what you will say. Try and show that you are confident and make them relate to you through your story. Great tips How to successfully get the first round of funding for your business



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Authord
Well, all this strategies are quite good and have a lot of influence in getting the required funds for your business. But nothing beats knowing your onions, and having the flow of speech. When you have an in dept knowledge on the thing you want to do, it will boost your funding by 90% chance. There is nothing investors love more than knowing what you're doing and how it's done.
But when they discover an atom of being clueless in you. Hmm I don't know what your fate will be.



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DarthHazard
What you said is on point and so true. If you know your stuff and are passionate about what you are talking then chances are you will get the funding because investors love a confident person and someone who knows every aspect of their business and the market it operates in. If you are fumbling around and can't remember what to say next then they will not be confident at all in investing in your business.



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Authord
Yeah, I have experienced that before, so that's why I hammered on that. Before someone gives you money or funds your business, you must give him concrete reasons to do that and back it up with proof, that's how they will know you are likely going to manage the funds well. Any even if you are not well knowledgeable in what you intent to do, just be confident and let your body movements lace that.



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jpyy
The competitive edge thing kills it for most. For instance, let's say you have a website. Well, a possible investor probably isn't going to be interested unless you either have traffic or real potential to gain traffic. That's just the way it is (as the Bruce Hornsby song says, lol). Therefore, the big hurdle will be trying to gain enough traffic and/or something else to make your website appear special.



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overcast
Just website alone won't cut it for investment. I think they need to see some proof of execution. like how this business makes money. And how does it plan to stay profitable. That's how it seems to be for many people. I have learned that it'd be reasonable to say that some of the time funding the business may not be easy but it can be doable with good contacts. Without good contacts it's going to be really hard.



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jpyy
You're exactly right here and what your referring to is a business plan. Someone wanting to get funding really needs one. However, making one often isn't easy. In that case, there is a business around hiring professionals.



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vinaya
I funded my business through a bank loan. Since I started my business from a loan, I have to pay back the loan repayments every month. repayments (interest and principal installments) can be very hard to manage when you are starting out. The best way to get started is to get a partner. When you have a partner, you can share loss even debt. The partner will also provide working hands and business management will become very easy.



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overcast
Here in my country we have the credit loan and the score system. And my score turned out to be very low. And for this reason i managed to not get a loan. And they asked me for the collateral instead. Not sure if that is a good idea to have such loan. I denied and I am doing this on my own with the savings. And so far that is not going to be working well. I think for many business scaling this overnight would not be any easier. We just have to see what may or may not work.



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iamawriter
When I started designing gardens I worked on advances that I received from my clients. I had a partner too who had more business acumen than me. She immediately told me we should keep aside some percentage of the advance received as profit (lol)



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Baburra
For me I think one of the best ways of getting your first funding is to prove to your investors that the system works and is profitable. I think there is nothing more convincing for an investor other than to see that they will get their money back and more by investing in you. Also, it has to be worthwhile for them in the way that it will be better for them to invest with you than on any other business that would likely yield them the same amount of revenue, and I guess this would be dependent on the type of person they are. Some would be fine with just the bonus of having someone trustworthy running the business whereas some might be looking for someone more tenacious, so it's important to find the right fit and not just anyone with the right amount of money.



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overcast
I personally self funded my business. And still working on freelancing. I am into the software consultancy. And earning some decent contacts for now. But still have to depend on the savings. And it may often make me anxiety about the future. Things are not that great. So having some partner and having some sort of funding definitely helps. In that case I am learning to fund on small basis. I give my time 100% to the business and freelancing. So hoping that it would pay the dividends for the time invested.



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DenisP
All very good tips, but personally I really like the third point. Yes, it is true that you might be here on a business endeavor and it is important to be formal and professional about it, but you can't forget to include the human element. I think that people would definitely appreciate for you to speak to them like a human being rather than some sort of money machine that operates on typical business lingo. I think when speaking to an investor it is important to make them feel like they are in on your business and you're going into it as partners.



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iamawriter
We have someone here who pawned his wife's jewellery and thus started his business. He is doing extremely well now and will soon get the gold back. His wife's confidence in her husband showed here. It became a win win situation. One can even mortgage one's property. Banks here have that arrangement.



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kgord
As usual, Razzy you have some excellent ideas It is just something that new business owners often struggle with. It is one of the ways that users can get some of the money that they may need, by following your advice!



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potentialwriter
In successfully getting the first round funding for your business, it has got a lot to do with human relations. Potential customers seek to find this attribute in a business entrepreneur before deciding whether or not he's going to be the right person to deal with. Giving close attention to them is much appreciated. It builds the confidence in them and simply makes them decide to take actions without any doubt.



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Corzhens
I admire people who have the guts to present their proposal to strangers for a possible funding of their business. I know that there are lots of successful businesses that went that way but I cannot comprehend how they really do it. We know of one film director who present the so called “pitch” to potential film producers. He said that he would suffer failure 99 times and it’s okay but when he hit the jackpot for once then he has a movie to make. Such tenacity amidst failures is admirable.



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