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Oct After initial interest, how to ask investors for money?

posted Jun 7, 2014, 2:37 AM by Siamak Ebarhimi
Attention from investors is the first thing. We discussed that in our previous post. If you have a good startup idea and follow some guidelines, there is a high chance to get noticed. Let’s imagine you succeeded and got investors’ first interest. After some introductory meetings, there comes a point at which the discussion gets more serious, and investors start considering to put money in your company. This generally means that you have done your homework. Investors believe in your company, your team and your vision, and they are willing to jump on board.crowdfunding marketing


Let’s assume you are pitching to investors. You are in front of them right now! You nailed your pitch, transferred your enthusiasm and thrilled their minds. You get to the very last slide, when you put together the investment proposal. Well, you are probably well prepared on the amount you need to raise. If not, you’d better not even show up to the meeting. But here comes the main point:

How to value your business? = how much equity are the investors going to buy

Main rule:

You need to have a reasonable range of pre-money valuation! You can’t just shoot the first estimate which pops up in your mind: that’s may be a deal-breaker. You can’t remit the decision to your investors either: how would that look in their eyes? Confidence is the right attitude. No matter how well you know your company, when it comes to valuation you may find yourself on a slippery surface.crowdfunding advertising


To be confident, you shall put together your knowledge of the company, its stage of your business, strengths and weaknesses, potential revenues, and systemically sum up their individual contribution to the overall enterprise value.indiegogo marketing


An exact estimate gives a very good impression of your skills as manager, but it should be matched with a range of variation. Investors want to see you know what you are doing and that you show enough flexibility for negotiations.kickstarter marketing


It’s like when you are about to buy a house: well before hearing the price you create a prince range in your mind and, if the dealer’s ask is within it, then you’ll probably take that option in serious consideration.kickstarter project


Congratulations, now your investment is one step closer! Learning however is not done yet. Stay tuned to understand more about how investors value your startup at early and later stages in our next posts.

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