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Being an entrepreneur is a wonderful and liberating experience, but there is a certain hard reality that comes with being your own boss. It’s demanding, but gratifying, tough yet teaches determination and fortifies courage. With every challenge comes its own life lesson that ultimately shapes the kind of business owner you want and need to be.
It’s easy to downplay any hardships when the reward is great, but equally, there are traits needed by every entrepreneur to shape any successful venture. You need endurance, stamina, and passion in bucket loads because without these you won’t go anywhere fast. Starting is all very well, but sustaining that energy through difficult times is tough.
That being said, having the right partners in place from the start makes things much easier. The truth is, without the right people backing you, it can be incredibly hard to expand as quickly and effectively as you would like. Finding the right investors that are the right fit is crucial, but with each funding round you’ll discover that there are more nuances to navigate and new things to learn.
While there isn’t a secret formula to share, there are a few things to bear in mind. Here are some top tips to consider when looking for investors.
It’s a marriage, not a friendship
Friends come and go but investors are considerably more long-term. Once you have found the right fit for your business, nurture this relationship like you would any marriage - it’s a partnership after all. Identify traits that will complement your own values and aspirations, look for skill gaps in your enterprise and think about who could fill them. It takes a lot of common ground and a shared determination to succeed.
Have a timeframe
Each funding round will have its own challenges, first as a fledgling business that needs to prove itself and then as a successful organization that requires further funds to reach its full potential. Have a clear timeframe in mind because you don’t want to miss a vital opportunity if the investment isn’t in place. Prepare well and plan properly; that’s the best starting point for any investment round.
Put purpose first
Planning and purpose is everything. When mapping out your timeframe for funding, consider with each round how you want to grow and at what stage so that you are ready to scale at speed when the time is right. If you don’t need to raise funds now, then don’t do it - it’s as simple as that.
Pick the funding that’s right for you
It’s important to do your research to understand what is the right path for you and your business. As you progress, your investment strategy will change in line with the needs of the business.
Learn the law
It is important to understand the legalities of fundraising and the implications for your business further down the line. Hire a good lawyer who can guide and advise you through the process. Also, take the time to research the process. It will help you feel informed and in control throughout - it’s your vision after all.
Network, network, network
Don’t sit behind a desk emailing people, get out there and meet them instead. Talking face-to-face leaves no room for ambiguity and you can instantly get the measure of a person from an informal conversation. Attend as many events as possible, talk to everyone and get your name out there - there is no better way to find an audience and, crucially, potential investors.
If you have already completed a few funding rounds, then keep on top of your initial investor base. Naturally, they will want to introduce you to others and hopefully reinvest themselves if you grow as planned and they are pleased with the progress. Remember, the money might be going into a service or product, but they are investing in you as a person as well, so be clear with your proposition and confident in your approach.
Just keep going
This isn’t exactly advice, rather words to live by. It’s hard to run a business and you are allowed to have an off day now and again. No-one is perfect. Manage your own expectations by accepting this.
Move away from wherever you are working for a minute, make a cup of tea and remind yourself why you are embarking on this adventure. You’d be surprised how effective a motivator it is. Whether you’re a team of 1 or 100 - everyone needs reminding of their purpose once in a while. Take a deep breath, keep calm, drink tea and carry on!
Sarah Jones is the CEO and Founder of Sprii.com