How To Attract Investors For Your Business With A Business Plan

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Many people write to me and ask me how to attract investors for their business with their business plan. Of course, it is not simple to attract investors with a business plan. Investors generally prefer to see execution and momentum rather than words on paper. In this article, I will explain how possible or likely it really is to attract investors with a business plan, and offer some tips on what you can do to increase your chances of getting an investment for your business. You may also be interested in this article about how to go about raising money at the idea stage of your business.

Investors Prefer To See Momentum

First thing is first. As mentioned earlier, investors prefer to see momentum. So whether you get an investment or not, try to always be moving your business forward regardless of anything else.

Marc Suster, a very well known venture capitalist, wrote in his blog about how he is attracted to lines and not dots. What he means by that is that when he first meets entrepreneurs, he typically does not invest in their businesses. Instead, he prefers to monitor their progress over time. The first meeting is a dot. And a few months later, when he checks in on the progress of those entrepreneurs, that is another dot. By connecting those dots, he makes a line. If the line shows growth and momentum, that is attractive for him in the entrepreneur. But if the line connects dots that are similar to each other which means that there has been little progress with the business, then that entrepreneur and business is not attractive for him to invest in.

Attract Investors With A Proven Track Record

If you don’t have momentum, all hope is not lost. One thing you can do is impress potential investors with the track record of your team. Investors typically like to invest in great teams. So if you can show that this team is a winning team, that can help you.  The team is you, your co-founders and business partners, and the mentors and advisors that you have.

Let’s take a closer look at what is meant by “proven track record.” Proven track record can mean that you have successfully built a company in the past. It can also mean that your mentors or advisors are very known and reputable people.  If you have not built a team around you just yet, here is a blog post on what to look for in a business partner or a co founder. And here is a video explaining what to look for in business partners.

Attract Investors With Social Proof

As mentioned right above, investors like to see that other smart people believe in your business. So if you have been able to attract reputable mentors, co founders, or advisors, definitely note that as you approach potential investors. They love to see such social proof. And it makes them stop and wonder what the other intelligent person sees in your business that they may not see.

Attract Investors With A Large But Realistic Promise

Investors need to make money. So show them how big the opportunity is. Is your target market a billion dollar market? Are you able to compete and win in that market? Potential investors want serious proof that this is the right kind of a business idea at the right time, with the right management team. So show them that you understand the market and outline the steps (in quick and simple terms) of how you will dominate in your market, and the large potential of your business.

If you need help identifying your target market and its size, here are two videos for how to correctly identify your target market, and then how to calculate the size of that target market.

If you need help writing your business plan, we have a full article tutorial with a template for how you can write your business plan.

Weitere Geschäftsressourcen

Für weitere Ressourcen für den Geschäftsstart werfen Sie bitte einen Blick auf unsere mobilen Anwendungen zur Geschäftsplanung. Hier ist die iOS Businessplan-App und hier ist die Android Businessplan-App. Zusätzlich gibt es hier die iOS Fundraising-App. Und hier ist die Android Fundraising App. Und hier sind unsere Business-Apps auf dem Kindle. Und hier ist ein Artikel, in dem ich das Argument gebe, dass unsere Android-Apps die besten Business-Apps auf Android sind.

Und bitte besuchen Sie meinen YouTube-Kanal, in dem wir viele Marketingthemen behandeln.

Autor: Alex Genadinik

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