1) A Great Story
When you explain your opportunity to people they should say ‘Wow!, I like that, let me know when you get it moving”. Building an “elevator pitch” is a great discipline as it gets you focussed on building a great jargon free story. Resource
2) A Great Team
In the beginning there may be just you. However start building a team of people that support you in legals, accounts, IP, marketing and any areas you need support in. Find a grey hair to mentor you. If you are a grey hair find another! Resource
3) Great Credibility
The innovation or idea is one part, the other part is actually having the capability to bring the product successfully to market. Meaning … you will use investors funds well and responsibly. This involves building distribution, showing your track record, getting your IP secure, good advisory board or directors, milestones achieved etc. Resource
4) Storytelling: Lots of compliant ways to tell your story
An Elevator Pitch is a good start. A two page summary helps. A short business plan. An offer document eventually. A video script. If you are seeking capital you cannot blog about this fact to the public but you can blog so people get engaged in your story as you move from an idea to prototype to market. Along the way you will attract followers. If you dont believe this works go to kickstarter.com and put nano in the search field! Resource
5) Followers: Lots of suitable people to tell your story to
You can have a great story but you need people to tell it to. Start building lists now.
Starting with a pen and paper, make a list of the people who are impressed by your business. Every good business has fans! Afterwards they often are very grateful that you thought of them as part of your company’s future.
Friends and family typically provide smaller amounts of capital on the basis of relationship rather than on the basis of financial rewards. Larger amounts though depend on many of the pointers in this article.
In addition to Friends, Family and Fans, look outside your business sphere of influence to people such as prominent identities and professionals to develop an idea of who might be interested in investing in your business.
Once you have a list of say 200 friends, family, fans, employees, customers, landlords, prominent identities and professionals, categorise them. The majority of funds raised in early stage funding comes from these categories. There needs to be a fit between them and your funding requirements. By now your advisors should have agreed with you the amount of capital you need to raise. Note beside each name the size of share parcel they could possibly take. Start at $10,000 then $25,000 and over $50,000. But don’t approach them yet. A Capital Raising Process has many steps and they must be done in the right order.
At ASSOB we work with you on building lists of Friends, Fans and Followers and then expanding and nurturing this through six degrees of separation. By this stage sufficient funds should have been raised to venture further to ASSOB’s investor list and then to ASSOB Sponsors contacts and Private Equity connections and followers as your raising is shepherded through the capital raising platform. Resource