Attracting and Choosing Investors – The Perfect Match for your Business (4 Video Links)

In today’s dynamic business landscape, investors play a crucial role in fueling growth. They can help provide resources and expertise to startups and established businesses alike. While the most common thought when it comes to investors is capital, there is a lot more than meets the eye.

 

There is no denying that securing investments is vital for business success. But, it is equally important to ensure the investors align with your company’s vision. Values, and long-term goals. To put it in simple terms: there is no point seeking investments from someone who wouldn’t understand nor benefit your business. That’s why it can be so tricky to find and attract the right investor for your venture.

 

Not sure where to start? Don’t panic! This blog article will explore the best tips to attract and choose the right investors for your business.

 

Subscribe to Accounting Accidentally on Substack. Get links to new content on accounting, personal finance, and humor/ short story topics.

 

 

 

Attracting new investors

 

This is the top priority for every business, new or long-established. Yet, to attract potential investors, every business must focus on key aspects of their process and operations. Investors want assurance that their money isn’t going to waste, which is why they seek must-have data and structure.

When it comes to convincing investment firms, businesses must clearly showcase the value they generate and their estimated market growth. That’s why, regardless of your business age, a solid business plan is primordial to meet the investors’ most basic requirements. This will ensure they can find the company’s objectives, target market, financial projections, and strategies outlined in precise and structured sections. Your plan serves to demonstrate professionalism and increase investor confidence.

Already existing businesses must be able to share an impressive track record as evidence of accomplishments, milestones, and recognition. This shows the potential progress for the future. One way of attracting new investors is to undergo GIPS Standards Verification (Global Investment Performance Standards). This helps investors compare performance across firms and ensures that best practices are followed. Being transparent with your figures is likely to attract new investors as it shows you are honest and legitimate.

Pitching to investors

Startups probably have the toughest job when it comes to attracting investments. As brand new ventures, they have no historic data to share. Instead, they need to convince through their strong value proposition, which is how they perceive their spot in the market and solve their audience’s specific problem. Investors value interacting, unique, and value-generating propositions. Therefore, researching and understanding your target audience is at the core of your pitch.

 

Storytelling also plays a crucial role in communicating your business vision and mission. This needs to compel but also highlight a real market opportunity.

 

Designing a winning pitch is a delicate balance of thorough data-evidenced research and the ability to share a dream through concise messaging.

 

 

Rejecting investors

 

While attracting investors is a common goal for businesses, it is equally important to evaluate whether these are a correct fit. Reasons to reject investors may include:

 

• Misaligned visions and values: If an investor’s goals and values clash with your business’s. It may lead to conflicts down the road. It is essential to find investors who share your visions and are aligned with long-term objectives.
• Lack of performance or transparency concerns: Some investors may not meet three required GIPS standards or adhere to their clauses. The standards are designed to provide transparency between investment firms.
• Incompatible network or expertise: Investors who lack relevant industry knowledge may not provide the value and guidance your business requires.

 

 

Securing investments for your business is undoubtedly important, but it shouldn’t take away your focus on finding investors who are aligned with your company’s vision and needs. Remember that finding the right investor is like finding a trusted business partner.

 

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(amazon author page) amazon.com/author/kenboyd

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/