The Pit - IMI Trust

With a strong economy, a surging stock market and business confidence high, more and more companies are raising capital or seeking venture capital funding.

Every day we are speaking with business owners who are seeking investor funds for the business. To be honest, some of the ways in which people seeks to raise funds is attrocious and really it is embarrassing.

So here is some basic things to think about before you speak to anyone who can assist you with raising capital.

1) Establish what your core business is, and your competitive advantage. You need to be able to isolate exactly what it is which makes you unique. Saying that you have something which nobody else has (in a developed industry) is pathetic! You may have a unique aspect, but not something which nobody else has.

2) Establish how much money you need to raise in the short term and in the long term. I can not tell you how frustrating it is, when we meet with businesses and the answer to this question is “I dont know.”

3) Establish how the investors can potentially benefit financially from the growth of your company. In other words… how are they going to make money? Is it going to be through a stock exchange listing in the future, a sale to a larger establish firm (for example the sale of Youtube to Google) or are you looking to pay healthy dividends to the investors.

They are 3 key points to think about before you meet with anyone. Ideally, have a business plan outlining the vision for the company, the product range and how you plan to accelerate the growth of your business. This will demonstrate that you are serious about moving forward in this path.

In this industry, people have minimal time and they don’t believe in initial consultations where the client walks in with no clear idea about their business, the direction of it, how much money they require… and why!