Sunday, September 6, 2015

OurEx Tips for Successfully Obtaining OurExchange Investors

Tips for successfully obtaining investments. Give yourself the best chance of Landing Investors on OurExchange.  

     There is no secret to obtaining investment funding. It is a case of making ‘You’ (after all you come with the deal) and your business as attractive as possible to your potential investors. This means explaining your company’s proposition and the potential return on investment clearly and succinctly so that your target investors understand your offer and find it attractive. You may think you have an amazing idea, but unless you can present it well others may not take the same view. 
     The majority of OurExchange Investors are not uber-rich billionaires who do not care whether they lose their money; while many are considered wealthy, most Investors are trying to get the best returns on their hard-earned savings. With that in mind, they don’t just buy an idea; they need to see a good idea that is packaged well and that is a less risky investment. Some OurExchange Investors will be passive investors, which may suit you, but others bring additional skills which sometimes gives additional investment benefits. An investor who was previously successful in your sector (been there and done it) can often bring far more in term of experience, contacts and general business acumen.  Investors will want to communicate and interact with be communicative.
     An OurExchange Investor is using their personal money and taking a risk by investing into your business.  So in the short space of time you have, you need to impress on them how good your product or service is, how impressive you are, that you have a market which can generate a profit and that the risk they would be taking is minimal.
     We have 15 points which will help you to be successful in your quest for Investors. You are unlikely to meet all of them, but hitting as many as possible will help your cause. Many of these points will already be familiar to those who have watched investors pitching with varying degrees of success on programs such as "Shark Tank", and being grilled about everything from financial projections to marketing. However, watching others squirm and thinking 'of course I’ve researched my potential market size', is one thing; actually being in front of potential investors and presenting your investment on OurExchange, with a convincing story is another!
     We have grouped the fifteen points into four areas: You as the Entrepreneur, Finance, Marketing and Exiting the business. The points apply equally to written and video presentations. Remember, OurExchange Investors see numerous propositions and therefore it is about making yours stand out and capturing their attention. No one is going to move on and read a 50-page Private Placement Memorandum, with detailed financial forecasts, until you have gotten their attention!

1.     A driven and visionary founder.
2.     Founder’s cash already invested in the business.
3.     Professionally networked with good connections for generating future business.

     The starting place for any investors are the idea and the individual. Investors will be attracted by someone who can explain clearly the idea behind their business and their vision for taking it forward (this means you can sell it). Not everyone is going to have the comprehensive vision, drive and single-minded ambition of Steve Jobs, nor the extrovert style of Richard Branson, but you will impress potential investors by explaining in your own style the potential for your business to grow in an exciting yet realistic way. They will also be impressed with personal commitment by putting your own money into the business, as well as the many hours, which you have no doubt invested.
     If you don’t have one already, secure a Seat Holder on OurExchange and start to develop a good network of connections who will help drive your business (and will also help in finding funding). Showing that you have a good network of connections indicates that you are serious about taking the business forward and possible routes to market.

4.     A business plan for investors, written as a concise Private Placement Memorandum.
5.     An accounting system which can produce clean financials.
6.     Professional advisers already engaged.
7.     Three year financials, including P&L, balance sheet and cash flow forecast.
8.     Realistic sales forecasts and customer growth strategy.
9.     The first orders delivered and paid for.
10.    Intellectual property protection underway.

     Potential investors need to be convinced that their money will be valued and treated with respect.  They will be looking to understand where the sales are going to come from. Can the idea be easily copied and is there any way that it can be protected? Do you have the systems in place for the growth you hope to achieve on the basis of their investment?

11.  Clear brand identity, including a website that is fit for purpose.
12.  Testimonials from existing and prospective customers.
13.  Evidence of social capital and associated media coverage
14.  A clearcut marketing plan for market sectors.

     Marketing may be an area that you are looking for the funding to cover. Generally most people seeking funding have a product or service and are looking for assistance in getting to market.  Although you may not be a marketing expert, do provide details of the actions you have taken to date, try and gain some profile around the business via social media, trade press etc. and at least have an outline marketing plan.

15. Have an exit strategy. 

      The Investor wants to know how they are going to get their investment back (hopefully with some profit), commonly referred to as an ‘harvest strategy’. Are there competitors who are likely to buy you out or another business which your company would complement?  Is a future IPO appropriate?  Let the Investors know how you intend on paying them back with a solid return on their investment.
     Although it may seem that you are doing all the work, making your business as attractive as possible will help you get funded the fastest (although be realistic) and give you a greater chance of attracting OurExchange Investors many of whom bring more than just cash to your business. 
     An investor is giving up their money and taking a risk; therefore, in the short space of time you have to impress them with how good your product/service is, how good you are and that the risk is minimal. Whether it is in writing or video, aim for as many as the above points as possible and you should be successful.

Happy funding!

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