A year or two ago you could get investment based on a good idea. Not surprisingly, these market conditions are probably unlikely to return, (at least in the short-term). To get investor’s interest you must have existing orders or contracts.
For small scale investments, you may need to re-structure investment to smaller packages. In today’s market, investors think twice about signing six-figure cheques, however there is still opportunity in areas of around $30,000-50,000 per investor. As current Australian Security and Investment Commission (ASIC) laws allow you to subscribe to 10 investors per annum, this could be as much as $500,000.
Entrepreneurs must also learn “investor-speak”. Learn how to think like an investor and what investors want. People think that investors invest in good ideas, but the reality is investors invest in “good markets”, that are growing and have massive opportunities, such as Green technology or Cleantech industries.
Finally, focus on your exit strategy. How will investors realise their investment opportunity? Once you start thinking like an investor, the fundamental questions you need to be able to answer are:
1. How much do I want?
2. What am I going to do with the money?
3. How have I validated my assumptions?
4. How well do I understand the industry?
5. How will I mitigate my risks and how believable am I?
6. How well can I sell my proposal?
7. How am I going to give it back (exit strategy)?
8. When am I going to give the money back?
9. How much will I give back to the investor?
10. Am I realistically capable of doing it- what experience do I have and who can I bring on-board if I do not have any experience?
Related posts:
- Current situation of equity market
- Private equity firm KKR finally trading on NYSE
- Can someone plz explains me what is a Private Equity Market?
- Why does inability to sell risky bonds for over-leveraged private equity deals affect the overall market?
- LBO Financial Modelling Training Courses – Private Equity Careers Centre
