You're ready to take your fledgling company to the next level, but it will mean you need an influx of investment capital. Whether you succeed raising this funding is one of the most important junctions in your company's future. That's according to Keri Gohman, president of Americas at cloud-based accounting software company Xero. While getting funded may sound intimidating, she says it doesn't have to be if you take the right steps to prepare. Here's what she says needs to happen before you make a pitch for capital.
1. Foster a resilient mindset and approach.
The vast majority of investors reject the pitches thrown at them. So, even though you're optimistic about your offering and future, perseverance is a character trait all successful founders possess. And be realistic about what you're up against. "Entrepreneurs can sometimes talk to over 150 people before they're really successful," she says.
2. Bring mentors and financial experts onto your team.
First, you need seasoned business mentors who know the ins and outs of everything involved in scaling a business. Not only can these people act as advocates and sounding boards, they can help connect you to others who you need to know. Second, since financials are what investors are going to focus on, your team needs to include financial and accounting experts who can prove your business model can withstand intense vetting.
3. Have a rock-solid business model and plan in place.
Your plan needs to be put to paper and must demonstrate your business has lifetime value, even if you're not yet at the point of profitability. A strong leadership team must be in place, as well. This means you have thought carefully about your weaknesses as a founder or CEO, and surrounded yourself with others who can fill in those gaps.
4. Get your financials in order.
Investors aren't going to give you money because your idea is great, or because they like you as a person. They're in it for a strong return on investment. Proving this to them means your books are infallible, and you're using the right kind of software to pull data instantly, regardless of what an investor may be asking about. "It's important to have software that ensures you have high integrity financial data--a place where your accountant and banker can go look at information and if possible a direct-bank feed, so that the investors know that the information is reliable and from a secure source," she says.