in Design

5 Ways Entrepreneurs Can Attract Investors Without a Business Plan

For an entrepreneur, a business plan is a waste of time. They consume a lot of energy, become pointless quickly, and worst of all, do not actually convince investors to invest in the startup. The good news is there are plenty of effective ways you can tempt investors into choosing your company. Here are 5 of them:

 

1.    Make a Fantastic Prototype

 

One of your first goals as an entrepreneur is to build a functioning sample of your product. For service industries, that would be a small scale version of your final offering, something you can use to demonstrate its value and validity. It does not need to be perfect — all it needs to be is functioning.

 

Investors are aware of how many ideas are good on paper, but terrible in practice. A functioning, even fantastic, prototype can serve as a proof of concept, alleviating their concerns and pushing them toward choosing to invest in your startup.

 

2.    Do the Proper Research

 

Investors aren’t just interested in a good product. They want a company that knows what it’s doing. That means knowing exactly what situation you are in, as well as the opposition you face. Fortunately, that is a matter of doing enough research.

 

Investors will test you on two areas of expertise — your market and your competition. For the former, you not only need to know important information about your target demographic, such as its size, but you also need a plan to get their attention. For the latter, you will need to illustrate how your small startup can put up a fight against larger existing competition. The more detailed your plans are, the better. Note that it’s a good idea to have useful data to back up your claims. However, it’s advisable to present these findings in an understandable manner to your investors. One of the few ways is to make use of visual content like an infographic or a heatmap so that you can effectively illustrate, for example, your target demographic.

 

3.    Write Up the Numbers

 

When it all comes down to it, investors are interested in making money. Some may choose you because they believe in your message or the change you are trying to make, but the vast majority are there to turn a profit. That means your financial projections are one of the most compelling arguments you can make in your favor.

 

Any complete financial projections should cover important details, such as cash flow statements, as well as a clear list of how you expect to generate revenue. It should also include the assumptions you are making so investors can read into your numbers with the right context. As your startup operates, you should adjust your financial projections in accordance with what has actually transpired.

 

4.    Prepare a Thorough Pitch Presentation

 

Short and punchy elevator pitches should always be in your back pocket, but you should not underestimate the power of a fully developed and crafted presentation. It is your best weapon. People are sitting in a room, ready to hear what you have to say. A presentation makes sure that you make that moment count.

 

There are a number of details you’ll need to cover in your pitch presentation. You need to talk about your startup, and what it represents, also known as its mission and vision. The team you’re sporting also needs discussion, as well as what problem your startup’s product will solve, and how it will do so. You should also mention how much money you want from each investor, as well as how much you will need to achieve your next goal.

 

5.    Ask an Investor for Advice

 

Even with the knowledge that an investor is primarily out for profit, you may find it difficult to mentally parse how to present your ideas in the most appealing way possible. The best path forward may lie in an investor.

 

Instead of guessing at what an investor is looking for, you can simply call one up and interview them. If you have a pre-existing relationship with an investor, it will be a lot easier to accomplish. Should one not exist, do not fret. You can use that discussion to create a relationship with an investor. If you are there just to ask for advice and to engage them in a discussion and not to sneak in a pitch for your startup, you will find that many are eager to speak and share their experience.

 

You do not need a business plan to attract investors as an entrepreneur. What you need is a plan to attract investors to your startup. The sooner you get to work, the sooner you can start raising capital for the next stage in your plan.

With Taskade, you can choose from a variety of different templates to design and create an effective, functional prototype; map out financial projections and write up your numbers; prepare a fully developed and crafted pitch presentation; and compile everything you need to inform, update, and/or impress potential investors; among many other possibilities. Simply visit www.taskade.com/templates to get started!

Alexandru

Alexandru is the co-owner of TopDesignMag. “If it looks easy, it's hard. If it looks hard, it's impossible. If it looks impossible, it's due tomorrow. At 8 A.M.”