Although investor funding is an important way for certain types of businesses to raise capital, it’s by no means a one-size-fits-all solution. In fact, most small businesses will never even come close to attracting investor attention.
Still, any business owner can learn a thing or two from how angel investors and venture capitalists think. So we took some prime insight into the investor thought process from these posts…
…and turned it into tips that any small-business owner can use, even if they aren’t looking for funding.
Business Success Tip 1: Know Your Market Inside and Out
Angel investors and VCs carefully look at the markets where their investments are performing. They keep an eye to the future and a finger on the pulse on leading industries. They want to fund startups that can make big waves.
As a small-business owner, you don’t have to be the next Google, but you should be keeping up with your industry and looking ahead. Ask yourself:
- What will the market for your goods or services look like in one, five, or ten years?
- How will technology disrupt it, and can you hop on board the change?
- How large can you realistically expect your business to grow?
- Where is your revenue coming from and will that source adapt?
Go to trade shows. Find online industry forums. Become the expert you were born to be.
Business Success Tip 2: Teamwork Makes the Dream Work
It’s uncommon for investors to fund solo projects. They like a team of experienced people that can stay on track and hold each other accountable.
You might begin as a freelancer or a one-person show, but as your business grows, you’re going to have to rely more on other people. Find people with the experience, capability, and leadership skills you can trust, and invest in them. With care, you can hire and foster an unstoppable business team.
More than anything else, they will be the ones that help your business succeed.
Business Tip 3: A Little Guidance Goes a Long Way
One boon to getting investors involved is the mentorship and guidance they can provide.
If you’re new to being an entrepreneur – and even if you’re not – ask for help when you need it. Even without a dedicated investor providing mentorship, you can…
- Talk to other business owners.
- Get involved with local or online business groups.
- Ask for advice from professionals you know and trust.
With outside help, you can get a clear view of your business and how you’re handling your finances. For a great business mentor resource, check out SCORE.
Business Tip 4: Envision the End Game
If you’re an angel investor or a VC, you look for an exit strategy upfront. That is to say, a point at which you’ll get your return on the initial investment.
However, for most businesses, public offerings and acquisitions aren’t in the cards. You probably won’t be able to cash out in five years to retire and live the sweet life. But that doesn’t mean you should avoid thinking about the end of your business altogether.