… Continuing from last week’s article and you can read the first part Here
The seven main characteristics that attract funding to investors
1. An entrepreneur who creates wealth
The first characteristic of companies that receive funding is that they are run by a wealth creator. A wealth creator is anyone who is able to create wealth from scratch. And there are two attributes that make up a wealth creator. The first is personality and the second is skills. Personality in this case has nothing to do with whether you are an introvert or an extrovert. But everything has to do with having certain skills that are attractive for wealth. There are six key skills that make up a wealth creator.
The first skill is a positive attitude. All wealth creators have a positive attitude. You see yourself, other people and the world from a healthy perspective.
The second skill is clear communication. All wealth creators are great communicators. They speak, write and send clear messages that are simple and easy to work with. They also ask meaningful questions, listen to customer feedback, and can sell their ideas.
The third skill is focus. All wealth creators are focused people. They created wealth by focusing longer on a worthwhile goal. Focus is critical to wealth creation, and businesses that attract funding need to have a sharp focus.
The fourth skill is trust. Trust is proof of competence, and all great entrepreneurs have confidence, self-control, and a healthy sense of self.
The fifth ability is integrity. Integrity creates trust and trust is the foundation of every business relationship. Therefore, companies that receive funding are run by trustworthy and credible people.
The sixth ability is resilience. Great entrepreneurs are all resilient people. Resilience is the ability to endure repeated setbacks without giving up. It’s the ability to recover, and the ability to rebound off setbacks quickly is critical to business success.
These are the six skills that make an entrepreneur a wealth creating personality. And investors are drawn to such entrepreneurs.
The second thing that entrepreneurs need to attract funding is skills. And there are three important skills that are necessary to create wealth. The first is creativity or innovation. The second is relationship building skills. And the third is marketing and sales skills. These three skills are valuable because they can be used to create wealth from scratch. They are useful in helping entrepreneurs get out of a negative situation or setback.
2. A profitable business idea
A company based on a profitable business idea is attractive to investors. A profitable business idea is an idea that solves a real problem in a new or unique way. That is, this idea must fill a niche in the market that is important for the target customers. And it also has to solve the problem in new or unique ways. Profitable business ideas therefore have two major characteristics. The first is the ability to fill in gaps in existing solutions. And the second is the ability to innovate existing solutions.
These two characteristics are important because human needs do not fundamentally change. What change is the way these needs are met. When you fill a niche in the market, you help customers see what is no longer acceptable and what is missing from the market. And when you innovate existing solutions, you show customers another way to solve their problems.
3. The business owner has invested capital
No investor wants to invest in a company that lacks the business owner’s own money. The reason for this is simple. Money goes where the heart goes. And when a business owner’s money is out of business, his heart is not there. Although many may claim that their lack of personal funding is due to lack of money. But if you look carefully you find that this is not true.
Anytime business owner funding is missing from a business, there are three truths present. The first is misplaced priorities. Most people have the capital to finance their business that is tied up in personal possessions and things. The second is a lack of discipline. That’s a lack of discipline to save and plan ahead. This is a big move away for investors. The third is a lack of high income skills. It also means that the likelihood that this person will be successful in business is very small. Whatever the case for you, a lack of business owner funding is not attractive to investors. To get the funding you need, you need to invest in your own business and get something on the table.
4. The right target customer
The fourth characteristic of a great company that attracts investors is having the right target customers. The right target customer is any customer who has a problem that your product or service can solve. And is willing to pay you and no other person for it. The right customer is also the customer who is reachable, easily accessible and aligned with the goals and visions of your company. Customers who create wealth have seven attributes to look out for. The first is that they have a problem. The second is that they are either dissatisfied with current solutions or do not know about existing solutions. The third is that they want to do something about the problem. The fourth is that they are open to trying your solution. The fifth is that they have the financial ability to take action if they like your solution. And the sixth is that they are ready to take action now. These six attributes must be present in your ideal customers in order to create wealth for you. Investors want to fund companies that have figured out who the right customer is for them.
5. Low to zero customer acquisition costs
When a company spends all of its money on customer acquisition, the company is on a financial treadmill. The cost of acquiring customers is critical to the company’s longevity and bottom line. And you need to bring your customer acquisition costs below the customer’s lifetime value. This means that you need to create a system that can be used to attract customers inexpensively and easily. To attract customers cheaply, you must have creative, communication, and relationship building skills. These skills will help you reach your customers, influence them properly and convince them that your product is worth their money. Keeping customer acquisition costs down is key to attracting the right investors.
6. High– –Profit margin
Profit is a company’s lifeline, and a large profit margin is a magnet for investors. However, the purpose of profits is not just to enrich you and your investors. But to create more space to inspire and inspire your customers. For example, if I have a profit margin of N50,000 and you have a profit margin of N5,000, I can do more for my customers than you can. I can send nice birthday gifts to my customers or invite them and their friends to dinner. All of this increases brand loyalty, repeat business, and automated customer referrals. In contrast, there is little you can do to achieve this type of effect. This means you’ll work three times as hard to get the leverage of your existing customers.
However, you cannot just increase your profits from scratch. You need a strategy to increase profit margins. To do this well, you need to understand that there are two types of profit. The first is the real gain in value and the second is the perceived gain in value. The real gain in value is limited in scope, as customers start to compare you to other competitors at some point. If you want to increase profit margins without resistance, you need to focus on increasing perceived value gain. This is where the profit elasticity lies. And that’s because the perceived gain in value is created from emotions and there are no real measurement criteria or limits. Increasing real value gain and perceived value gain is therefore the key to attracting investors.
The problem is that while most people can increase real value gain, few know how to increase perceived value gain. Therefore, the most valuable products are not necessarily the most profitable products.
To increase perceived value gain, you need to know what value means to your customer. You also need to know which area of your business or product is most fascinating to your customers. Then you have to become the best at this. And build a solid brand on it. Products with high perceived value always have the highest profit margins, and these products are the most attractive to investors
7. The right timing
Businesses like fruit have ripening times and seasons. And not all companies are ready for the market at the same time. Therefore, understanding the business you are in and when you are in that business is key to being successful. Investors will prefer companies whose time is ahead of those whose time is in the future. The key to timing your business is knowing when your customers are most receptive to your solution. Timing right will always hit customers when they are best ready to buy. And this timing can be influenced by the external environment. But it can also be produced through creative marketing. The key to attracting investor money isn’t getting into companies whose timing is far in the future. Especially if you don’t have the financial stamina to withstand years of drought. But to enter companies whose timing is right. Because only then can you create wealth quickly.
These are the seven key characteristics that attract funding to investors.
The truth is, there is no shortage of money anywhere. There’s just a shortage of companies that have the qualities investors are looking for.
Now that you know what drives companies to attract investors, how can you fund your business?
Let’s see your funding options.