The development of a business or the launch of new activities requires the mobilization of a large sum of money. Apart from using a bank loan to finance your project, you can also request financing from investors through a fundraiser.
Whatever the purpose of the fundraising, the principle is that investors carry out a stake in the capital of your company, the investors become shareholders of your company have the rights provided for by the articles of association and the profit will be shared with the height of the percentage of capital. Investors interested in fundraising put their money in innovative start-up companies or in start-ups with high growth potential. If the Angels business invests between 50,000 and 500,000 euros, the venture capitalists intervene with higher amounts. Therefore, only projects with high development potential ranging from three to five years can be the subject of a fundraising.A fundraiser can be translated in different ways, depending on the growth phase of your business.. On the one hand, there is seed capital which is used to finance the start-up of an activity and on the other hand, development capital which is used to finance the development of activities and the acceleration of growth in business. In all cases, the investors take part in the development of the capital of your company. In other words, you relegate and sell a share of your company’s securities to investors. These investors will then be assigned to your company to finance your development project. Investors then become shareholders within your company. Their statutes thus allow them to participate in general meetings and to have their share in the profits generated by the activities of the company.
The presentation of a quality business plan is required to convince your investors. For this, you need to detail your project in 20 to 30 pages. On a business plan, market research, analysis of competitors, business model, action plans for achieving objectives but also financial forecasts are to be mentioned. Mastery of your project and your vision is necessary before making the presentation . The attitude to adopt during this presentation is to remain humble while showing the interest of your project. If it turns out that investors are interested in the business plan, they offer an appointment to learn more about the project.
From then on, the next step is to move on to preparing a pitch . The pitch is used to summarize the project in a few minutes. The key points are to get to the point and structure the speaking time. Thereafter, also prepare for negotiations with investors. The valuation of the company, the amounts invested, the share of capital to be sold and the governance of the company are the essential points to be addressed. Once the
investors convinced by the project, a letter of intent will be sent to you. The investors’ proposals and the various clauses of the contract concluded during the meeting will be described in this letter.
Preparing for a fundraiser requires a lot of time and hard work. But with rigor and a good knowledge of the procedures to follow, success is certainly there. As an alternative, there are also other means of financing: grants or love money for example !