Gale Dunlap //October 16, 2014//
Ever wonder why some startups get investment capital while others struggle, fade and disappear?
Of course, the primary reasons entrepreneurs do well is because they have a solid product, a strong management team, and a hungry market they can prove exists.
But there are also instances where the product/service is good but because of the founders’ behavior or inability to explain his company, the start-up doesn’t get funding and never gets off the ground.
I spent several years with a company that matched high potential entrepreneurs with private “angel” investors. Many entrepreneurs got funding while others failed despite a valid concept. What made the difference? Here’s my take on it.
The most important task for an entrepreneur is to be able to clearly explain to investors (banks, angels, friends), what their company does and how investors will get a reasonable return on their money.
This sounds simple – but it’s not easy, and many people fail. Keep these points in mind:
If you keep these points in mind I guarantee you will be more likely to get an investment or at least sustained interest in your company.
And remember, angel investors can provide “smart capital.” They are often cashed-out entrepreneurs interested in your business because they were in a similar business. They can provide you cash but they can also provide connections and advice as a member of your board or as a C-level executive in the early stages of your company. Don’t be afraid to get help from others. I could go on about this – but that’s a topic for another article. Stay tuned.