How can I get funding for a project that doesn't yet have traction?
I am looking to attract investors - preferably ones who have experience and expertise in hospitality, restaurants, accommodations, franchising and product branding/merchandising. I am early stage and don't yet have any traction. Is it possible to attract investors at this stage?
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Jan 3, 2015
Let's say you need investors for a cookie business. Make you cookies, put it in some kick butt (they wont let me swear) packaging (which you will be selling them in) and come up with a kick butt delivery. If you have a good product and a good plan, then the rest will come into place if you don't listen to the "No's" Be excited about your product in an authentic way and others will pick up on the excitement. Stay up!
Jan 3, 2015
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Jan 3, 2015
It is in the little bits that we bring to the table that matters. Chances are that no matter how fool proof your proposal is you will still require to make some adjustments when seeking investors. If you are an expert in this field it is possible to approach investors but if you are just looking for a new adventure it pays to articulate your position. What are you offering. Answer this question sincerely. Regards
Jan 1, 2015
Absolutely. You just need a good idea and a convincing pitch. I recommend spending some time writing a business plan, creating a pitch deck - http://www.slideshare.net/Barcinno/the-perfect-startup-pitch-deck-24239339 - and creating some hypothetical financials. Also, you should create the business entity and open a bank account.
Your goal is to get people to believe in your idea enough to invest. Traction can help, but its not impossible to start before traction. Good Luck.
Jan 1, 2015
You have to fulfill some previous conditions:
To make the General Summary, Executive Plan, Business Plan and Financial Plan.
Professionaly written and prepared.
To make the full presentation of you, your company, your business (in general) and about your current project.
Dec 31, 2014
Do you have an MVP of your product that you can start demonstrating? In my opinion, this will help you establish a presence.
Dec 31, 2014
This is to be a hospitality business, so aside from gathered information, (via restaurant reviews, and resident opinions, etc), there are no MVPs to date.
Dec 30, 2014
Network yourself throughout the investor community. As integrated with the right people and continue to develop those relationships, it will influence the investors to trust you and your business model.
Dec 30, 2014
You may want to consider crowdfunding on Indiegogo, however, you will ned a Business Plan, Project Timeline and a couple of impressive images plus a video. To create a campaign on Indiegogo costs nothing, so whatever amount you raise is for you to invest minus the commission from the site. If you need help with creating the campaign, or the materials for it, message me to discuss:)
Dec 30, 2014
Thanks, Ivalina. I do have a completed business plan with projections, as well as a developed business model. I have considered Indigogo, but I don't think that is the best place to present my project. The financial targets all seem to substantially lower than the amount of funding I will need. I would only require one funding round, but would need the entire amount in that round. Once operational, the business would fund all subsequent expenses.
Dec 30, 2014
See my 2 courses on Bootstrapping and Raising Angel Financing here: http://startupplanet.com/cs-stage1.htm
This is a complex question and process with many variables involved. Each type of investor has a specific profile of company they invest in. The bar is high in terms of market opportunity and growth potential. Service businesses have a rough time attracting capital but need less to scale usually. Investors require some competitive advantage to get the return they expect for the risks. Most institutional VCs do not do services, hospitality or restaurants, at least unless that already have a high EBITA and it is expansion capital (low risk). I know of no banks that would do this. Generally 6 quarters of profitability are required for a loan against cash flow.
I think you need a CEO Coach and advisor as these questions are very basic and clearly you lack the experience needed to navigate this complex area.
I also offer some flat rate consulting/coaching projects to help companies raise funds. See: http://clevelenterprises.com/pricing.htm
Dec 30, 2014
Hi Maureen, my experience suggests that it would be difficult at this stage to attract investors, unless you personally know any yourself? The best advise would either be to start small and grow slowly or join hands with someone who can help you grow via investment. Just develop a good 3-5 year business plan ad even a bank would support you!
Dec 29, 2014
My advice would be to approach the Welsh Government who are looking for start ups and established businesses to set themselves up in Wales and employ welsh staff. They have very significant funding from the European parliament for such ventures.
Dec 29, 2014
Yes it is possible, there are 'angel' networks who
Offer investment for low returns, they may also offer
Advice on how to move a business forward. There are
Angel networks on LinkedIn.
Dec 29, 2014
Thank you, Joan. I have searched for investors on LinkedIn, and will continue to. Eventually, I should come across the right opportunity.
Dec 29, 2014
This might just been what you need: www.crowdcube.com
Dec 29, 2014
Thanks, but Crowdcube did not approve my application because of the company's lack of traction.
Jan 1, 2015
Hi, I'm sorry about CrowdCube. I would still suggest Indiegogo, like Ivalina suggested
Dec 28, 2014
It would be very difficult but you might be able to crowdfund it provided you have something innovative going on with the business model. Consider making a video blog about the startup and letting people either fund it through Kickstarter or possibly make the option to buy in something attractive to an existing vendor's budget.
Dec 29, 2014
You are so right. I have appealed to countless investors and investor sites. I am offering up to 46% in company shares, and crowdfunding is a consideration; however, it seems the majority of projects getting the attention needed for funding are primarily tech-based.
Dec 29, 2014
Noting the situation with crowdcube, you might try patreon. They just celebrated a $10,000,000 year vs last year's $259,000 and as far as I can tell you just sign up and go.
Jan 3, 2015
A final thought on this... As you have discovered that tech seems to get more crowdfunding support, a logical course of action might be including a developer in the plans. You/they might be able to create an app that automates some part of the business and then you'll potentially have something amazing to pitch and get funded all at once. The easiest way to get an app developer involved is to figure out first what aspect of the business would be easier (ordering product etc) using such an app and post the assignment somewhere like freelancer.com. In any event it might get the crowdfunding approach some pre-launch traction to work with.
All of these tasks have been done. Since this will be a hospitality business, traction cannot occur until after we open.
Thanks.