Australia's online magazine for entrepreneurs & SMEs

How to generate capital

1. Do not underestimate the time it takes for the capital-raising process – think hundreds of work hours.
2. Expect an INTENSE level of scrutiny.
3. Have your finances and legal affairs in perfect order.
4. Have a succinct, realistic business plan ready and ensure someone in your team can present it brilliantly.
5. Be able to answer the questions: ‘How much money do you need?’ and ‘Why?’ (Sounds easy? Try it.)
6. Choose your investment banker or adviser wisely. Rigorous reference checks are in order to ensure they have a good track record. There are lots of dodgy, expensive capital raisers out there.
7. Write up (with or without the help of lawyers/VCs) a detailed information memorandum for potential investors.
8. Don’t oversell the business. A wildly ambitious forecast with poor research can turn off an investor instantly.
9. Always opt for introductions to prospective investors rather than cold-calling.
10. Do your due diligence on prospective investors and make sure they have the right cultural fit with your business.