Having raised over $12mn in the last ten years for small start ups and new companies and more for listed businesses, I have come across literally hundreds, if not thousands, of business plans and funding proposals. The ones chosen to go forward had a number of things in common and I am going to tell you what they were so you can bear this is mind when you are looking for funding.
1. The first thing is what gets rejected. If you employ a broker, a corporate finance person or whomever do a lot of research before you do it. I could name you 5 corporate finance firms in London who couldn’t complete a deal to save their lives and yet they are still around. Why? Because they end up with the dregs.
These ‘coporate finance experts’ also tend to be the ones who are very pompous and full of themselves. Their pompous nature more often than not is way bigger than their meager abilities and you do not want to entrust your business to them. The reason is they are ‘hawkers’. They will hawk your plan around town to everyone.
I have had projects come by my desk three or for times. Nobody wants a deal everyone else is rejecting. So choose your advisor very wisely.
2. Make sure your business plan is to the point. I would recommend having an executive summary that is off the scale. I mean a real punchy factual document, no more than five pages, that tells the reader what the idea or business is, how it came to be, what revenues it has made up to now and what revenues you think it will make in the future.
If you have this you will more than likely be asked for your business plan but, and here is the crucial part, you will probably be asked in for a meeting to present it, which is what you want.
3. Be aware that if you have peaked someones’ interest, the first place they will look for your company will be the Internet. Even if you are in an idea stage, have something on the web, even if it is a ‘coming soon’ page.
Also be aware that if there is anything controversial about you, your company or a previous company, this will be the first question that a financier will ask. Have the answer and there probably won’t be a problem.
4. Have your presentation down perfectly, anticipate questions that could be asked and prepare an answer. This sounds so obvious, but trust me, probably only 30% of people who came to meet me had a well prepared presentation.
5. A financier will try to rattle your belief in your project. If I was unsure about the project I would ask stupid questions, questions designed to annoy the presenter. I wanted to see what he was like under pressure. You would be amazed at how many people either lose the plot and start ranting or completely fold under any sort of awkward questioning.
It was often part of my routine just before I said yes. I would ask “what if I told you that we are just not impressed enough with you or your company to take it any further?” Some would stand up and rant “I didn’t want to do business with you lot anyway” or something to that effect. We passed on those and they did not know how close they came. The ones who said something like “I thank you for your time but I will just be carrying on trying to get funding because I believe in the project” were shook by the hand and told we had accepted them.
Taking the above few points on board will increase your chances of getting funding by 100%, what you need now is some ideas where to find funders right? OK. Here are some that I myself have employed. They are slightly sneaky but they work.
1. Go to a one man band recruitment agency and tell them you are looking for a CEO who can bring expertise and finance with them. I raised $100,000 for one project like this.
2. Find some small company brokers who deal in pre-ipos (if your business could list on a junior market within a year). These guys will charge you up to 30% in commissions, but if you really need the funding, they can do it.
3. Join the big business networks. Make friends with marketing guys and then tell them you are looking to raise money for your business. These proper net workers can produce some very good results. I have been ‘prospected’ by people this way and you will find you make some very good contacts into the bargain.
Good luck! Remember, I am happy to answer any specific questions through the Tweetboard tab on the left hand side.
Regards
David
@TheMarketMaker
1. The first thing is what gets rejected. If you employ a broker, a corporate finance person or whomever do a lot of research before you do it. I could name you 5 corporate finance firms in London who couldn’t complete a deal to save their lives and yet they are still around. Why? Because they end up with the dregs.
These ‘coporate finance experts’ also tend to be the ones who are very pompous and full of themselves. Their pompous nature more often than not is way bigger than their meager abilities and you do not want to entrust your business to them. The reason is they are ‘hawkers’. They will hawk your plan around town to everyone.
I have had projects come by my desk three or for times. Nobody wants a deal everyone else is rejecting. So choose your advisor very wisely.
2. Make sure your business plan is to the point. I would recommend having an executive summary that is off the scale. I mean a real punchy factual document, no more than five pages, that tells the reader what the idea or business is, how it came to be, what revenues it has made up to now and what revenues you think it will make in the future.
If you have this you will more than likely be asked for your business plan but, and here is the crucial part, you will probably be asked in for a meeting to present it, which is what you want.
3. Be aware that if you have peaked someones’ interest, the first place they will look for your company will be the Internet. Even if you are in an idea stage, have something on the web, even if it is a ‘coming soon’ page.
Also be aware that if there is anything controversial about you, your company or a previous company, this will be the first question that a financier will ask. Have the answer and there probably won’t be a problem.
4. Have your presentation down perfectly, anticipate questions that could be asked and prepare an answer. This sounds so obvious, but trust me, probably only 30% of people who came to meet me had a well prepared presentation.
5. A financier will try to rattle your belief in your project. If I was unsure about the project I would ask stupid questions, questions designed to annoy the presenter. I wanted to see what he was like under pressure. You would be amazed at how many people either lose the plot and start ranting or completely fold under any sort of awkward questioning.
It was often part of my routine just before I said yes. I would ask “what if I told you that we are just not impressed enough with you or your company to take it any further?” Some would stand up and rant “I didn’t want to do business with you lot anyway” or something to that effect. We passed on those and they did not know how close they came. The ones who said something like “I thank you for your time but I will just be carrying on trying to get funding because I believe in the project” were shook by the hand and told we had accepted them.
Taking the above few points on board will increase your chances of getting funding by 100%, what you need now is some ideas where to find funders right? OK. Here are some that I myself have employed. They are slightly sneaky but they work.
1. Go to a one man band recruitment agency and tell them you are looking for a CEO who can bring expertise and finance with them. I raised $100,000 for one project like this.
2. Find some small company brokers who deal in pre-ipos (if your business could list on a junior market within a year). These guys will charge you up to 30% in commissions, but if you really need the funding, they can do it.
3. Join the big business networks. Make friends with marketing guys and then tell them you are looking to raise money for your business. These proper net workers can produce some very good results. I have been ‘prospected’ by people this way and you will find you make some very good contacts into the bargain.
Good luck! Remember, I am happy to answer any specific questions through the Tweetboard tab on the left hand side.
Regards
David
@TheMarketMaker
TheMarketMaker
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