Disclaimer – I am talking about the Indian landscape here.


money-tap1

The one question that any entrepreneur looking at raising outside capital asks himself/herself is “when do i approach investors?” Tonnes and tonnes of material has already been written about this.

Why don’t Investors invest in my plan?  What should i be prepared with? what is expected of my company?

The answer to all these questions is to Time the investment so you can be prepared for it.

1. Do Venture investors invest in Business Plans? ….NO!!

Not unless you were an integral part of some wildly successful firm and have a track record to flaunt.  If someone says otherwise, I’d like to meet them

2. I have a prototype ready, is now a good time?…hmmm., Maybe

Depends on how much money is required to convert the prototype into a business and more importantly the market opportunity for the business, for instance if the venture requires 5 Million Dollars to be a Business, but can be next best thing to sliced bread….well people might take their chances.

So is there a right time?

Basically Early stage investing is an art rather than a science and there are no hard and fast rules.But what entrepreneurs CAN do is try to address the concerns of an early Investors.

And there is primarily one main concern…”Will this Business deliver on its promise???”

Now how can you address that?

There are a few things

1. Have some semblance of a product/service ready.

Early stage investors do not expect you to have a uber cool product that rivals the best in the market, heck if you had that, you wouldn’t be looking at investments in the first place. But a product/service that actually performs what its supposed to do, can go a long way in addressing concerns.

Seeing is believing, and Investors need to see what your product/service is today to visualize what it can become.

2. Get some customers

You have customers? they paid for it and they are happy? wow!! that conveys, oh yea!…there is a market for this, in other words, thats market validation.

Remember that everyone sees the world differently, things that you see as no-brainers might seem strange to me. Do not expect Investors to understand your business. It is your job to make them understand it, and nothing can convey it quite as much as customers using your product/service.

If you do have these, most times, Investors will return your call and you will land that meeting.

Advertisements