The first round of funding can often be make or break for a business. It’s important to have your “elevator pitch” ready like on Shark Tank, but so much more goes into the behind the scenes to put your best foot forward before potential investors. We’ve put together a tried-and-true checklist for preparing for your first round of funding:
- Prepping Your Business Plan: From venture capital firms to Family Offices like Scandia Partners, many potential investors will want to review your business plan before even offering to meet. Make sure that your Business Plan is up-to-date and offers a realistic roadmap for the next 30, 60, 90 days and beyond for your business.
- Business Legalities: The small details matter, especially to high volume investors. Ensure that all of your tax information is correct. Make sure that articles of incorporation have been filed if necessary and most importantly ensure that you have a legitimate EIN number registered with the IRS before accepting any funding.
- Financials: Review your financials with a trusted advisor, your CFO or tax professional prior to meeting with potential investors. Make sure that you include a capital plan with projections running through a variety of scenarios. Investors are looking more closely than ever at financials as we work through the Covid-19 pandemic.
- Equity Breakdown: Make sure you have a clear understanding of how much equity you are willing to give up in the company. Furthermore, make sure that any prior investors are well aware that you are seeking funding. It is crucial to come to the table with as much information as possible and know where you stand when it comes to what amount of equity you can make available to new partners or investors.
- Research: You know that the potential investor is going to look into you, your associates and your business history. Make sure you do your research as well. What types of funding do they typically provide? What are their core values? Strengths? Are they hands-on or hands-off?
Once you have prepared all of the above and done your research, ask yourself the ultimate question: “What investors best align with your goals and values?” There’s no need to approach a certain firm if you believe their values conflict with your own. When it comes to this phase, we hope you will consider Scandia Partners. We are a family-first company working hard with our partners to add value with investments, positive reinforcement and our decades of scaling businesses and growing profits. If this sounds like we might be a fit for you, fill out our contact form today at this link.