As an entrepreneur, I’ve had to present my ideas in front of many key decision makers. From closing sponsorship deals to recruiting executives, I’ve lost count of how many pitches I’ve given over the years—but I’ll never forget my first pitch to raise my fund New Money Ventures. Raising money is one of the most challenging and rewarding experiences but as we know women are at a disadvantage with only 2% of VC funding going to women owned businesses.
According to the Bank of America® 2022 Women & Minority Business Owner Spotlight, 79% of women business owners plan to obtain funding in the next year; however 75% of women business owners still wish they were more knowledgeable about small business financing. This is a big reason why I am so passionate about lending my experience and expertise to up-and-coming entrepreneurs—and why I launched a venture fund focused on money and mentorship. Here, I want to give four things to think about that will help you find the right investors at the start of your business.
1. Know Your Business Inside and Out
It sounds simple enough but understanding every aspect of your business before launching requires substantial research and deep reflection. Why does your product or service need to exist? Why will consumers be excited to spend their money with you? And why are you the one to create it?
You must also understand your position in the market, what your competitors are doing, and how you stack up against them. Think: audience demographics, industry trends, and hard data that will not only back up your business proposition but also solidify your standing as a dedicated, success-oriented entrepreneur. Then, compile your findings in a robust pitch deck to share with your potential future investors.
FYI: If you're looking for a guide to building the perfect pitch deck, check out the episode of Launch House that I shot earlier this year for tips, tricks, and a free presentation template to get started.
2. Pinpoint the right source of funding
Once you have a handle on your numbers, it's time to pinpoint the funding source that's right for your stage of business. The right choice might be friends and family who believe in your dream; a small business loan to cover initial costs like inventory or equipment; an angel investor in your niche; or a venture capital firm dedicated to helping you scale. My advice is to consider your immediate needs. If you secure funding, which option will help your business reach the next level with the least debt? There's a lot to consider, so give this point some good, hard thought before you jump in.
3. Prepare to answer the hard questions
Now that you have your target, take time to prepare for questions that everyone from venture capitalists to small business loan lenders will likely ask about your and your business.
What are you using these funds for?
Why are you valuing your company the way you are?
Where are your competitors sitting?
What data do you have to back up?
What is your metric for success?
This is also an opportunity to prepare questions for your investors, too!
What do they look for in investments?
How much do they typically invest?
Do they have any funding mandates?
How will they support you?
If you're looking into a loan, ask if they lend to other businesses in your industry.
How long is the application process and what do they consider?
Ask for testimonials and feedback from current or past customers.
4. Don't go it alone
Lastly, don't feel like you have to go through this process alone. I suggest working with your accountant or small business advisor to prepare documents, run numbers, and help you look at your business from a lender's perspective. Don't have a business accountant yet? That's ok! Banks like Bank of America offer Small Business Bankers that provide advice and guidance on everything from loans and lines of credit to alternative routes to access capital.
The best investor is much more than cash in your pocket. In my experience, having someone experienced and knowledgeable enough to support and help grow my business in my corner is more valuable than any dollar amount. For this reason, I became a Bank of America business card holder and never looked back!