How to Get Financing for a New Company

Private Equity financing

Private Equity financing

One of the most difficult challenges an entrepreneur faces is raising capital for start-up. Efraim Landa is an entrepreneur who has faced these financial challenges and co-founded a company who can offer advice for start-up and emerging businesses. The first thing that needs to happen is that there must be a clear-cut business plan in place. If the business has no plan for success investors and other possible financing options will not be as quick to “buy in” on the idea no matter how good it is.

Business Plan

A business plan should inform potential investors about how the business will function, how profits will be realized and a projected growth rate. These must be reasonably stated and if possible include research data. A business plan should give potential investors or lenders a good look at the company’s real potential. Without a proper business plan investors will not have anything concrete on which to base their decision of whether or not to invest in a company.

It is important to create ways to present the company’s information through a presentation. It should include information about your project, the market and marketing strategies, and how the business will be managed. Also explain why the product is important and why it will sell. This, in conjunction with a well written business plan can be the “selling point” for a business.

Potential Investors

After the plan is in place it’s important to identify any potential investors. There are many options and companies like Effi Enterprises that are established to help entrepreneurs find investors. They can provide the guidance needed and they are also private equity investors. Get informed on the options available and pursue the routes that seem most productive.

Company Valuation

A term sheet should be created which outlines why the company is a good investment. This will include a valuation. If it is uncertain there should be at least a reasonable estimate of the company’s worth. Investors will be interested in helping establish a business in which they will be able to reap financial benefit in the long haul.

Investors

Angel investors are usually individuals who are willing to offer start-up financing for a new business. Venture capitalists offer financing options for new and start-up businesses in exchange for controlling interest and a portion of the profits. There are several types of private equity financing options available. It may be in the company’s best interest to work with a consulting business such as Effi Enterprises which is a company who helps start-up businesses locate various types of funding options. They can also help with preparing or reviewing business plans. One area in which a business needs direction is in locating angel money and other sources of business capital.

Getting Started

Once a firm or individual is located which can help provide financial backing for the business, set up an appointment. Be prepared and present the business plan and the proposition is a very honest manner. Let them know how the business started and how it is functioning presently. It is important to convince them that the company is a good investment. Be prepared to discuss how business strategies, investment strategies and financial arrangements will be handled. It is imperative that the potential investor can see the progress of the company so far and its great potential for profit.

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About Efraim Landa

My name is Efraim Landa I am an entrepreneur and an expert in venture capital. I am the co founder of Effi Enterprises, a venture capital firm as well as the co founder and CEO of Gluco Vista, a company that is in the process of developing a non invasive glucose meter for those with diabetes.

Posted on May 18, 2012, in Business financing, VC financing, Venture Capital and tagged , , , . Bookmark the permalink. 1 Comment.

  1. Mr. Landa definitely has experience in this field so it’s good to hear from someone who knows what they are talking about. A lot of good tips in this post

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