Times have been hard recently – especially for start-up businesses trying to get funded. Whether trying to find investors in your company or secure a loan from a bank, these days, just getting through the front door can be a challenge. So what can you do to increase your chances?
Below are a few tips relevant to any company raising funds, but are especially relevant for women-led companies.
When I speak with women who are starting businesses, they are usually well-versed and enthusiastic about their product and the inspiration behind their business. This is critical and the main focus of your pitch when approaching a potential purchaser of your product, but it is only one part of your pitch when approaching a funding source. Remember, you are selling an investment in your business, not just the product itself.
Talk about yourself and the people on your team. This is a time to BRAG!! An investor is not going to give you money if you and your team are not well-suited to lead the business, so talk about their and your talents and experience and what everyone brings to the table to enhance and grow your company. Remember that investors are investing in people as much as the actual product.
Talk about money. In my experience of watching pitches and working with women, they are much more likely to brush over this topic than their male counterparts. Make sure you know how much money your company needs, what it is going to be used for (“use of proceeds”), what will be accomplished with the money (“milestones”) and how long the money will last (“burn-rate”). If it is an equity investment, what percentage of your company are you selling? Will the company reach profitability from this investment or loan? Supply a current financial statement and projections and be able to support each and every number – or, if you are not a financial person, bring someone along for all meetings and presentations who can answer these questions.
Don’t be afraid to ask for help. Surround yourself with advisers who have expertise in start-up businesses and in your industry in particular. Don’t be afraid to ask for help or approach people who may seem too lofty to be involved in your business!! You may be surprised by what help is out there and how people can be willing to support a start-up. So don’t be shy to ask!!
Hire professionals who have worked with start-ups. A lawyer, accountant and/or financial advisor can be an invaluable resource if involved in the start-up community. Hiring your mom’s trusts and estates attorney who is doing you a favor will not save you money in the long run! These advisors will have the necessary expertise to help you, but will also know others who can. Don’t be afraid to ask for introductions.
You MUST ask. I have seen many presentations, by both men and women, where they do not ask for anything. They simply assume their audience knows what they want. Please, ask. You can ask nicely, as we have been taught. But be strong and direct!!
Best of luck to you.
— Elizabeth Sigety
Elizabeth Sigety is a partner at Fox Rothschild LLP, resident in the firm’s Warrington, PA office. She practices in the Technology & Venture Capital Group and serves as co-chair of the firm’s Franchising, Licensing & Distribution Practice Group. She works with a wide variety of start-up companies, including angel and venture finance, mergers& acquisitions, securities, franchising, licensing and distribution matters. She is a Managing Director and Founder of Delaware Crossing Investor Group. Liz can be reached at 215.918.3554 or [email protected]