So you’ve got a phenomenal idea for a business.
The only problem?
You don’t have the capital to bring your vision and business concept to life.
In the old days, you might have visited a bank to speak to a teller about taking out a commercial loan — depending upon the type of business and the amount you were looking to borrow. However, thanks to the marriage of finance and tech in the new digital age, a plethora of online commercial lenders have emerged, nearly flooding the market with the creation of this new Fintech space. These financial lenders, often funded by institutional investors, or in some cases, large banks, have enabled borrowers to receive commercial capital with varying rates of interest, with more efficiency and accuracy than antiquated bank technology could provide, thanks to the way these platforms aggregate, filter and make sense of financial data. If you’re unfamiliar with this form of commercial borrowing, you can check out some of the more popular online Fintech solutions here.
If a loan through a bank or private institution doesn’t appeal to you due to often lofty interest rates, or because you are seeking an investor for reasons beyond money (which many entrepreneurs do; hoping for advising from their investors) you might be lucky enough to have fellow friends and family with enough capital to support your idea. Most of us, though, aren’t this lucky.
But if you do possess a stroke of luck, you might have enough savings currently to pull from in order to fund your idea independently. This could be a wonderful thing – as it enables you to retain complete ownership of your company rather than share equity with your potential stakeholders. This is an especially attractive option if you know how to run and scale your business effectively and believe your valuation is accurate.
If you’re not lucky enough to have money to borrow from close friends or family or savings to tap into, the next viable step is to approach an investor. Nearly any entrepreneur that’s tried this – often countless times – can tell you that finding the amount of capital you’re seeking to raise for your business (to know how much to ask for, read here) from the right investor is a very difficult job. And securing the capital is not the only difficult task; so is ensuring that your business churns a profit so your investor(s) / stakeholder(s) are content.
If you’re unfamiliar with the different types of investors and the capital and or services they are able to infuse in your business in order to bring it from the ground to the market, you can read about those here.
If you need to know how to build a pitch that will make an investor want to invest in you, you can read about that here.
But for now, let’s discuss the 5 top personal attributes investors look for in you when deciding whether or not to give your business concept and/or business plan capital. Believe it or not, most good investors are not just investing in the perceived value of your business; they are also (and often mostly) investing in you.
The Top 5 Personal Attributes Investors Look For When Considering Whether or Not to Fund Your Business
No seasoned investor will give their money to an entrepreneur that is not confident about their business idea, the valuation they set (if you need to learn more about how to value your business, click here) and their confidence in bringing their business idea to life. Think about it — if you had tons of capital readily available to invest in a business (which might be the case if you’re reading this) would you really give your money to someone jumbling their facts or words in their pitch? That’s why creating a compelling pitch that attracts real, interested investors is so important. For more on how to achieve the perfect business pitch, read here.
An investor wants to know your a workhorse. They want you to be ambitious and bold, though not too bold to risk their capital investments. An investor seeks a self-learner.
If you want to take someone’s money, you need to show them that you can handle this responsibility. You need to show them that you are.
No investors wants to give their money to a person or persons they think will point the finger in another direction if something goes wrong. After all, it is their money they are hoping to churn a profit on. No, nearly all investors want to ensure that you and your company will assume accountability in the face of crisis, or if something were to go wrong. And I can almost guarantee you, more than one thing will go wrong, which is why an investor looks for…
Tenacity: a word as bold as the people that possess it. If you were looking to give your capital to someone to bring a potentially lucrative business idea to life, wouldn’t you want to give it to a person that you know will remain steadfast (not necessarily in their approach; read about pivoting here) but in their willingness to drive forward in the face of adversity and bring not just their concept but their employees and enterprise to life on a grand scale. (To learn more about scaling your brand, read here.)
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