Over the past year of publishing the Divine Living MAGAZINE, I’ve written a lot about my dreams for expanding my business and brand. I’ve been having a blast thinking about what else I’d love to create for the woman entrepreneur community if there were no limits or consequences—from clothing lines to hotels to even a Divine Living airline.
All of this dreaming has now brought me to the point of taking action. And what I’m looking at now is something I would not have expected to be thinking about in the beginning of my business: seeking investment.
Somewhere along the way I had developed the idea that there was some virtue in owning 100% of my company. So traditionally my strategy for fund raising has been that if I needed $50k for a project, I’d go sell $50k worth of services.
But as I started thinking bigger and considering new business streams, I naturally looked to the super successful women-led companies I admire to see how they got to where they’re at. I noticed that most of those companies, like Jessica Alba’s Honest Company, Tori Burch, Food52 and Plated had all leveraged investor money to scale.
Take Food52 for example. From following them on instagram I noticed they had started offering cool new products and giving us a look inside a beautiful new office space. So I looked them up on CrunchBase and found out they had $9 million in investor money. So I’m starting to see that trading equity for capital is actually an incredibly smart way to grow your business and brand more quickly.
When you think about the fact that Jessica Alba is reportedly 15-20% owner of a company that’s valued over a billion dollars, you can see that working with investors and partners makes a ton of sense for everyone involved.
I think it’s important to remember that the billionaires we admire do not have more hours in the day. They’re not working any harder than we are—they’re simply working smarter. I used to think that people sought investor money when they got into trouble or debt, but I see now that it’s actually a strategic, conscious choice.
I’ve been learning that there is so much venture capital out there right now specifically for women entrepreneurs. It’s not free money, but it is available if you’re willing to put in the effort. And fortunately the process is not as daunting as you’d
think—the information is out there and you do not have to be an MBA or an insider to gain access to the investor community.
Though I’m still no expert and only beginning this journey myself, today I’m sharing some of what I’ve learned about what it takes to seek investment. If you’re ready to start thinking bigger in your own business, check out my tips and favorite resources for creating a compelling pitch for your next big idea.
PREPPING Your Pitch
Something I learned during my time at the White House is that anything you want is just five phone calls away. When I started thinking seriously about taking investment, the first thing I did was think of everyone I know who is an expert in the field. I find that people in your network are usually happy to share knowledge, listen to your ideas and make suggestions to point you in the right direction and it’s often the best way to gain perspective on a new project. After I spoke with a girlfriend’s boyfriend who’s an investment banker, and then to another friend who invests in companies, I discovered new resources and gained clarity on my next steps. Plus, both offered to catch up with me when I was further along the path and intro me to the right connections to pitch my idea. It gave me something specific to work toward and as the Course in Miracles says, “Thoughts grow stronger as they are shared.”
If you’re developing a new product or service or even just expanding your business, the first thing you have to do is get to know the market really really well. What unique need does your business solve? How prevalent is this need and how many potential customers are there? What’s your competition and what gives your product a unique advantage or selling point? Before you design your business model, it’s important to find out everything you can about your target demographic and what else is out there so you can back up your pitch and guide your ideas. Through this process you should be able to develop a mission statement and explain why your vision will have a positive impact in the world.
While you’re figuring out the details of your concept and business model, you’ll want to take a look at what other companies are doing and what funds are available. It will help position your pitch to understand the kinds of companies that different funds are currently interested in and to know what amounts of money the businesses you admire are bringing in. There are so many funds out there specifically for women entrepreneurs and few are able to advertise, so the best thing you can do is seek them out, find out if they take applications and see what you’ll need to pitch them your idea.
CrunchBase.com gives you a look at what other companies are raising and who the lead investors are.
Now that you know what’s going on in the market place and why your product is better than the competition, you have to create a model that will make financial sense and demonstrate what scale your business needs to be at for profitability. You’ll need to figure out your operating budget (from material costs to staff to offices and marketing) and what your pricing and profit model will look like. From there you’ll get a sense of how much investment you’re seeking (depending on your track record of success, a higher number typically requires giving away more equity). The full business plan will bring together your market research and competitive analysis, your “why,” your financial model and growth projections and the final piece—your plan of execution, which lays out how you’ll market and distribute the product. This will include what partnerships you’ll seek, who you’ll need to hire and the budget you’ll need to make it all happen.
Now that you have a well developed concept of a product or service the world currently needs from you and a plan to make it real, you’ve already created something of value. The next step is to organize your ideas into a presentation: an investor deck that lays out the problem, the solution you propose, how the product works, the market and competitive analysis, the unit economics and financial projections plus the rollout strategy and milestones. You may also want to create an executive summary—a one or two page document you can send to contacts and potential investors that shares the most important aspects of your business without giving away too many details. You’ll want to work with a graphic designer to lay everything out visually with images, infographics, tables and branding, making it easy for investors to see your vision.
Best Pitch Decks lets you browse tons of successful start up pitch decks to give you an idea of how to create yours.
Now that you have your ideas and plans well organized into a presentation, you’re ready to get out there and give the pitch. Reach out to your original connections and any new contacts you’ve brought in along the way. Before you begin, there are a few key things to know about the pitch process. First, remember that “no means not yet” and be willing to hear no without giving up on your idea. Some of the coolest businesses of the moment were turned down over 100 times before they found the right investor—so have faith and be persistent. However, also be open-minded to feedback as you may gain transformative insights that will lead you toward a better product, positioning or investment strategy. When you pitch, don’t bog down investors with the details. Provide them with a more nuts-and-bolts business model upon request, but keep your deck and your presentation focused on the big picture vision, the why and the potential for returns and impact.
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