| Business Start Up Funding | | | | customers but have found, on a more modest |
| | | | scale, that for every $1 you spend in |
| Startup companies often get frustrated when | | | | marketing you can earn $2 back. This |
| they can't find investors willing to fund | | | | information is a silver bullet too. In this |
| their new idea. What they don't realize is | | | | case you've proven that you understand how to |
| that in order to get an investment, they need | | | | acquire a customer for less than they are |
| more than just a good idea and the promise of | | | | spending, which is a big deal. |
| future profits. What investors are looking | | | | |
| for is a "silver bullet" in the business that | | | | This may seem like an obvious necessity for |
| ensures their small investment will yield a | | | | any successful business (let alone one |
| huge return. | | | | looking for business start up funding), but |
| | | | there are plenty of companies that overlook |
| Business Start Up Funding - You Need a Silver | | | | this point. If you haven't proven that you |
| Bullet | | | | can profitably acquire a customer, perhaps |
| | | | this is a good place to start. |
| The silver bullet is the aspect of your | | | | |
| business plan that proves your company can | | | | Analyze the costs involved in acquiring your |
| grow quickly. For example, perhaps you've | | | | first batch of customers and try to project |
| proven that 100 customers are willing to pay | | | | this cost out to the next round of new |
| $99 for your newly developed product. If all | | | | customers and the round after that. Try for |
| you need is additional cash to build 1,000 | | | | those next customers and see if your results |
| more items to sell more at that price, you've | | | | match up with your predictions. Once you feel |
| got a silver bullet. | | | | comfortable that you understand your cost to |
| | | | acquire customers you can begin identifying |
| Investors are compelled to make investments | | | | specific capital needs to accelerate that |
| in startup companies that have proven some | | | | process. |
| aspect of their business model "works" and | | | | |
| that what they really need is more capital to | | | | Speed Things Up |
| make it work better, or to sell more | | | | |
| products. | | | | Speeding up time can also be good reason to |
| | | | ask for business start up funding. If you |
| Many entrepreneurs, on the other hand, wander | | | | find that it takes you two months to service |
| around in search of business start up funding | | | | a customer now, but with additional capital |
| to find the silver bullet in their business | | | | you could service a customer in two weeks |
| plan and that's a less attractive | | | | (and therefore earn revenue in a shorter |
| proposition. In this case you're asking an | | | | time) you've found another silver bullet. |
| investor to put money into a treasure hunt, | | | | |
| and not into a business. Until you | | | | Investors are always hungry for businesses |
| demonstrate you can sell something (at a | | | | that could be even more profitably or grow |
| profit), you don't have a business worthy of | | | | faster if just a little more capital was |
| investment. Therefore you need to re-focus | | | | applied. Creating a strong case for this use |
| your efforts on finding your silver bullet. | | | | of capital will make it easy for investors to |
| | | | understand your needs. |
| Investors Love Paying Customers | | | | |
| | | | Read, Aim, Fire! |
| Every business model is different, and as a | | | | |
| consequence the silver bullet of one business | | | | Perhaps you only have one of these silver |
| may look somewhat different than another. The | | | | bullets ready to present to investors. That's |
| common thread, however, is that each of them | | | | fine, as long as you have prepared a strong |
| show your investors you have found a facet of | | | | argument for why this one single factor will |
| your business that works well and simply | | | | have such a great influence in your growth. |
| needs business start up funding to be | | | | |
| exploited. | | | | Presenting your case to investors isn't about |
| | | | coming up with as many reasons for investment |
| A great place to start is with paying | | | | as possible. It's not about quantity, it's |
| customers. Even a few customers create proof | | | | about quality. What you want to demonstrate |
| that that there is an active buying market | | | | is that you have key factors in your business |
| for your product that could be even bigger if | | | | that have a demonstrated track record for |
| you had the capital to reach more of them. | | | | growth, but need capital to accelerate that |
| | | | growth. |
| Notice that here you're not telling an | | | | |
| investor, "if we build it they (customers) | | | | If you're in the process of raising business |
| will come". What you want to say here is "we | | | | start up funding right now, step back and |
| built it, and they already came". This puts | | | | take a second look at your PowerPoint |
| you in a much stronger position to suggest | | | | presentation. Does it clearly articulate the |
| that if you are capable of repeating the | | | | fact that you know how this investment is |
| process provided you have more business start | | | | going to ramp up the value of your startup? |
| up funding. | | | | If not, try taking another pass with the |
| | | | focus on finding your silver bullet. That's |
| Understanding Conversion Works, Too | | | | the type of ammunition your investors are |
| | | | really looking for. |
| Maybe you don't have a 10,000 paying | | | | |