Deborah Meaden’s Top Tips for Securing Investment
If you decide to make the jump and set up your own business, chances are you’ll be offered tons of well-meaning advice. Some of it will be helpful, some of it will be rubbish, a lot of it will be contradictory. In Common Sense Rules, the new book from Deborah Meaden, the denizen of Dragons’ Den sets out to question the truth behind the clichés. Meaden believes that it is only by busting the myths behind these clichés that the business world can really move on.
In a series of 4 articles, Deborah Meaden will reveal to the The NextWomen her best tips for Success as an Entrepreneur. Here, in the second of the series, Deborah Meaden gives her top tips for securing investment.
I often hear start-ups complaining about how difficult it is to secure finance, yet in my experience entrepreneurs rarely give would-be investors enough information to persuade them to part with their hard-earned money. Today, more than ever, entrepreneurs have to present some pretty compelling reasons for investors to part with their cash, which means presenting a rock-solid pitch as well as some convincing numbers.
Here are some things to consider when you’re starting the search for outside investment.
Think about the investment you need, not the investment you want
Don’t fall into the trap that many entrepreneurs stumble into of looking for outside investment without first considering what they are really after. There are lots of opportunities out there; you just have to be disciplined about your approach. It’s worth remembering that banks and the government provide opportunities for entrepreneurs as well as for investors.
Get the business plan right
I cannot emphasise enough the importance of a well-crafted and concise business plan. This is a vital document, and every effort should be made to present the business efficiently so that an outsider can immediately understand it.
Get the pitch right
When entrepreneurs pitch to us Dragons in the Den, I know that it looks like a nerve-racking experience, but if you are prepared and know what you want, there’s really not much to it. Just remember, it is not just the business that investors buy into – it’s the entrepreneurs themselves.
Make sure you’re on top of the key numbers
Never, ever, utter the words, ‘I am the ideas person, not a numbers person.’ It is just not good enough to be setting up a business while claiming to know nothing about basic numbers. And it’s certainly not good enough to be asking for someone else’s money while you’re making such claims. You should be on top of what your business is worth, and if you can’t even remember that, why should investors trust you to remember what their money is worth?
Learn how to deal with rejection
On the long journey of getting a new business off the ground, ‘no’ is a word that entrepreneurs have got to get used to. Many people say that you mustn’t take ‘no’ for an answer, but I would say that that approach will lead to disappointment and frustration. Entrepreneurs may well think that their concept is the best thing since sliced bread, but it is absolutely useless to keep on ramming the point home with an investor who is obviously never going to put their money in the venture. Just getting in front of an investor is an achievement. It would be a pity to waste the experience by being too narrow-minded to benefit from the meeting.
Successful UK businesswoman and entrepreneur Deborah Meaden is best known as one of the dragons from BBC 2's hit show Dragons' Den. One of the most popular shows on BBC 2, it regularly attracts audiences of over 3 million. Deborah has had an extremely successful career in business, starting out at the age of 19 with her own glass and ceramics import company, moving on to run one of the first UK franchises for Stefanel, an Italian footwear and clothing firm, and eventually joining the family company, Weststar Holidays. She staged a management buyout in 2000, and in 2007 sold the business in a deal worth £83 million, giving her the freedom and capital to invest in new opportunities. Her Dragons' Den investments range from MixAlbum, an automated music mixing system, and Magic Whiteboard, a product that combines the best of a flipchart and a whiteboard, to Sarah Lu, inventer of yoodoodoll, a doll that you can make resemble anyone you like (or dislike).
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