You’ve built a business up from nothing. Along the way, it’s either created or adopted new technology, giving your customers or internal team a big attraction for investment.
We’ve spoken before about how funds can be gained for any business, but a tech brand is slightly different. It relies on proving your development journey, as well as the profits that have stemmed (or will stem) from it.
Wondering how to raise capital for business? We have the answers…
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Demonstrate the Technology in Action
Investors won’t buy into something blind. They want to see it, either up close or in a way in which they can analyse its impact. Product or SaaS demos should form the crux of your pitch. Zoom into features, let a gadget get to work… even display a prototype in the room, if it’s ready. Whatever the nature of your offer, never shy away from exhibiting it in operation.
Outline Your Market Niche and Variables
Why are you different? Why does that matter? Most importantly, where is your audience, and do they have a reason to keep coming back to you? Market research is critical in a pitch as long as you don’t overload those in front of you. Just be concise and accurate in your predictions for market value, based on what you’ve accrued so far in terms of sales or interest.
Calculate Your Burn Rate
More than any other organisation, a tech company can eat through huge piles of cash before it becomes profitable. This is the burn rate: funds divided by the number of months in which they’ll be used up. If you’re pitching for £250,000, for example, and you’ll have spent the investment by eight months, that’s £31,250 a month. Venture capitalists are largely resigned to a high burn rate, but they still want to understand it.
Recognise Your Team’s Strengths
To be a genuinely great prospect, many tech businesses combine several talents. You might have a marketing genius on one side, and a coding extraordinaire on the other. How will this team grow in the next year or two? Outline their strengths, and explain the delegation of hard skills (science, IT, back-end development) vs. soft skills (management, leadership, critical thinking).
Sketch Out a Realistic Exit Strategy
While investors don’t appreciate talking about exits straight away (after all, they hope you’re committed to the idea, not just the rewards), it’s useful to have a blueprint for earning big once the business is sold. Because, eventually, it will be. Some investors may be more prone to taking earlier exit leaps, which means you should research who you’re pitching to. Then, determine your offering’s ultimate value appreciation over time and the amount it could reasonably stand for.
Everything we’ve spoken about for how to raise capital for a business boils down to precise financial awareness. That’s the be-all and end-all of a pitch: if you haven’t streamlined your earnings, the whole enterprise looks jeopardised. Speak to the RJF Accounting & Business Support team for a better view. Tech is exciting, but we can’t ignore the basics that underpin it…