We all know where we want to go, but we don’t always know how to get there. Sometimes the journey is murky, then there are obstacles, and what a surprise that one step does not automatically lead to the next. I’m sure we all know of an inventor who had a vision for a product to fill the market need, set out to design and implement, and ultimately delivered a product ready for the market. Still, he was struggling to get the next round funded. Then a roadmap was built that guided the results to match the investment criteria of a set of investors and got funded! Not all investors and funds have the same criteria. There are many commonalities and there are specific parameters used to guide the investment decision.
The road is not necessarily a straight shot. If it were, it’d be no fun.
Successful entrepreneurs and business owners know how to get investors on board. Their most useful tool to get funded is to create a roadmap and execute a course that matches the investment communities’ terms. Keep in mind, this roadmap might have some sharp turns or beaten paths, however, if the roadmap matches your investors' requirements, you will get funded with ease.
What is this ‘criteria’ being spoken of? Investors tend to follow a certain criterion when considering whether or not to invest in a company. What guides them is their experience coupled with a desire to mitigate risk and increase their chances of success in their investments. Investors usually want to see that the company they are thinking of investing in has legs to stand on. Investors look at components such as profitability, revenue growth, debt levels, the assembled team, the market, and of course how it matches the investment criteria.
Investors want to see that you’ve enlisted a strong management team that shares your vision for the company and will execute a successful business strategy. A track record of success also gets you funded. It is important to keep in mind that investors want to see that your product or company fits well into the market and meets their investment ‘criteria’. The more competitive advantage your company has, the larger the market you can capture. Lastly, what is your company’s growth potential? A strong growth trajectory and a clear path to an exit is extremely conducive to being funded.
Building a roadmap that fits the investors’ criteria can guarantee you success in funding.
Once you build this roadmap in alignment with potential investors’ requirements, it is imperative that you update them about your progress each quarter, so they see that you are lock in step with their terms and essentially they have no choice but to invest. Include projections and keep them updated in subsequent communications. Think about it, if you present your roadmap to a handful of investors and successfully execute the plan and prove that you are capable of achieving the goals that match their funding criteria, you are funded!