| If your company is at a point in its history and | | | | the action plan and will include an executive summary, |
| experiencing solid growth where you are considering | | | | your business strategy, a SWOT analysis, market |
| looking for outside investors for your capital needs, | | | | research, financial projections, etc. My advice is to try |
| then you want to know if your business will be or | | | | to find out what the investors like to see in the |
| can be attractive to investors. If you plan to search | | | | business plan and customize it and tailor it to their |
| for equity investors, you should know that they will | | | | needs. |
| expect a significant return on their investment (20% | | | | 3. Determine the value of your business. You will |
| to 50% is not uncommon) and many times within 5 | | | | need t enlist a professional to assist in this and would |
| years. These investors will look carefully at the | | | | recommend that you seek referrals from your |
| candidate company to characteristics that include, but | | | | advisory team as to who may best be prepared to |
| are not limited to: a solid and proven management | | | | do the valuation. |
| team; potential company growth; solid business plan; | | | | 4. Network! Again, use your advisory team for |
| and evidence of strategic thinking and planning in a | | | | contacts. There are many investors in the network |
| strategic plan with vision, mission core values and | | | | that are not "publicly" known or advertised or that |
| short term & long term goals. | | | | only work from referrals from trusted sources. |
| And the equity investors will expect you to give up a | | | | 5. Interview and select an equity partner. Carefully |
| portion of your business. So, one needs to carefully | | | | plan for an interview process and use the talents of |
| consider: Do I need equity investors as a source of | | | | your advisory team again. Prepare a list of questions |
| capital to grow the business? If you decide to obtain | | | | to ask each prospective investor. Explore multiple |
| equity financing, here are 5 major actions you will | | | | revenue sources to get the best deal. You want to |
| need to take and probably in this order (although | | | | find the best personal fit and the best business fit |
| they can be done simultaneously to some degree): | | | | when selecting the equity partner. |
| 1. Build a trusted advisory team. Select an attorney, | | | | You will need to "keep the faith" and not get |
| accountant/financial advisor and business coach to | | | | discouraged in your pursuit, as you will encounter |
| build that team. This advisory team will be a key | | | | disappointments. My advice is to use those |
| resource to your business and will help you develop | | | | disappointments as a learning tool and to identify the |
| your business plan, guide you through this process, | | | | "lessons learned" in each disappointment. Use |
| provide introductions to key contacts and networking | | | | strategic thinking and planning to re-write parts of |
| for you. | | | | your business plan if necessary or to develop specific |
| 2. Develop a strategic plan and a business plan. The | | | | aspects of your business. Always stay focused on |
| strategic plan includes the vision and mission for your | | | | your vision, mission and goals for your business. And |
| business, along with the core values or guiding | | | | always remain patient, persistent and positive in your |
| principles of your business and the short & | | | | search! |
| long-term goals for the business. The business plan is | | | | |