Raising funds for your startup business can be a painful and slow process. Many entrepreneurs opt to spend their time growing the business rather than drafting fundraising lists, attending to booking meetings and asking for financial help. Unless you have this proven record of successful businesses or sales skills, the reality of fundraising for novice business owners may take four to five prospects before closing the first deal. Instead of expanding your list and adding 50 more people, wouldn’t it be better for you to improve your close rate from 20 percent to 75 percent?
When you are raising big amounts of money from capital firms and investors, closing dates are crucial. The interest on $50 million is around $50,000 weekly—this means that the cost of a delay is huge. Angel investors and other people who will support your company will just ignore closing date and then send the money whenever they feel like it. Include a phrase in the document that clearly states the agreed closing date for both parties.
Offer investment options.
Flexibility is crucial when you are dealing with non institutional business investors. If you are raising funds out of debt, it is recommended that you offer two options for participation: various thresholds, different repayment times and various time horizons.
Anticipate the follow up meetings.
Keep the courtship process going forward by ending every meeting with a plan for the next meet up. Schedule reference calls with past partners, investors and board members to show that you have other people vouching for you in the business.
Ask about their doubts.
End up the meeting by asking them their concerns and doubts about the investment. Your response will show if you are able to concern these concerns or not. This information is helpful in prepping reference partners for any subsequent calls.
It can be easy to get into the habit of selling things. As soon as they have come up with the decision to invest in your business, just take a step back and let the process happen without selling.
Ask for it.
Whenever you are raising money, you get easily tied up with paperwork, negotiations and maintaining investor relationships. But don’t forget that you are here to get the money. You can ask the check by asking the investor if he is going to mail it or do it through wire transfer. Always remember that the deal is only closed when the money is already deposited in the bank.