Quick Tips: What to Ask Yourself Before Applying for Financing

The right questions to ask, financing options to try

How’s your management team? Investors need to know that there is a succession plan in place in case something happens to you, and they need to have a sense of who is likely to join your team. “What gets investors very excited is the folks looking to add to your management team should you get the investment,” says Redus.

VENTURE CAPITAL: Somewhat similar to angel investing but venture capital comes from institutional investors. According to Redus, in most cases, the minimum investment is no lower than $1 million and runs upward of $10 million.

What you need to ask yourself:
Does your business address a large market? Where venture capital is concerned, the market size should likely be at least 1 billion. It’s imperative to convince investors that you can corner at least 1%-2% of this market.

What’s your competitive advantage? In addition to  market size, investors look for differentiation. What makes your business so unique in terms of a patent, difficulty of duplication, or exclusivity?

What’s your growth potential? Your business should have at least $30 to $50 million in growth potential, again, for a significant risk. Investors are expecting a significant return.

RESOURCES

SBA
Angel Capital Association
The National Venture Capital Association
The Marathon Club

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