The Best Way Start-ups Should Prepare For Investors In Nigeria
The fashionable thing in Nigeria now is starting up a business whether online or offline. It is probably due to the messed up situation of the country. The truth is that start-ups should prepare for investors.
Proper preparation prevents poor performance. This is true for all aspects of life and definitely truer in start-ups.
As a start-up who will need investors, you will need to be ready. The investors can be elusive and vague and there is always competition given the proliferation of start-ups no thanks to technology and the internet.
When you want to meet the few venture capitalists in Nigeria, there are things that will place you above others jostling for their money. This is what we want to handle in this article.
We want to discuss ways start-ups should prepare for investors and this will place you at an advantage if you get them right.
How Start-ups Should Prepare For Investors In Nigeria
1. Get the financials right
The investors are in the first instance very interested in the financials of any start-up. The reason is simple; the sustainability of the business is based on cash flow primarily. The returns on their investment will also hinge on the financial flow.
It is therefore important that start-ups should prepare for investors by preparing the financials. You should have the financials ready at their request.
The cash flow, balance sheet, income statement are some the financials that may be required of you. Ensure you have them ready.
Your present status and the projections of where you will be in the next five years are important to the investors. Of course, you have to predicate the success on the money that will be given to you by investors.
2. The right ingredients
Investors and venture capitalists look for stability in any start-up they will invest in. They will rather invest in a team than in a sole entrepreneurship. Therefore, start-ups should prepare for investors by making sure some of these things in place.
You will need a succession plan in the event that something happens to the CEO of the company. There should be support at the operational level by having the right people to deliver success.
They should be a business plan and market opportunity and you should be able to address the market opportunity and pain point with a good solution. You will need to show the investors a clear path to success.
3. You will need to understand what you’re asking for
This is still about finance but at a different level. The money you are asking for is crucial to the business itself. You will need to understand. Start-ups should prepare for investors by knowing exactly how much they need.
You should know what you are doing with the money. Make efforts to speak with financial experts as they will help your valuation. You need to understand your valuation and get it right. You don’t want to be asking for too much or too small.
This particular tip is helpful whether you will use investors or not. You just need to know how much exactly you need.
4. The right investor and introduction
Getting the right investors and venture capitalists can be a daunting task for any entrepreneur. Take your time to analyze what you need in an entrepreneur. They are many of them out there but not all of them are for you.
One of the ways start-ups should prepare for investors is by getting information on the investors and working on getting introductions to them.
When you have the right investor, you would have completed a very good part of the process. Just look for investors that will match your start-up and you can begin to work on the meeting itself.
Here, you will need an introduction from someone that can offset the relationship. The truth about the investor-startup relationship is that a lot is based on trust. Work on it.