In the last few times, there has been a flood of new startups in India. Today there are many such startups which have established themselves on a very large scale. Private investors are investing in many such startups.
According to the United Nations report, India is the fastest growing economy in the world. In such a situation, it becomes necessary that the youth of India pay special attention towards starting startups, but many people are not aware of what and how to prepare for investment or investor meeting.
If you have also started a new startup or you have an idea of a new startup and you need investment, then today’s article is for you only.
In this article, we are telling you about the preparation for the meeting with the investor for investment:
Legal Structure Of Business
Before starting a startup, you have to prepare the legal structure of your business. There are many types of companies, if your business is proprietary, partnership or limited liability then you cannot get funds. Instead, if you are a private limited or public limited, then you can get funds.
Market Research
After deciding the legal structure of your company, research your market. Inside this, get information about your potential customers, such as who can be our customers, how much will be our potential sale in a given time, how much revenue can we earn, find answers to various questions like this. For this, you can take the help of a chartered accountant or finance expert.
Budget Sheet Questions
After this, when you go to the meeting with the investors, then they will see your budget sheet and on the basis of its statistics, the investor will ask you some questions like:
(a) How will you use the funds received from the investors?
(b) How much money is needed?
(c) Where and how much money will be spent?
(d) How can we do more work with less expenditure?
Prepare all possible questions and answers based on the statistics in your budget sheet, so that when investors ask you these questions, you have answers to all of them.
Identify The Right Investor
After understanding your business, you have to identify the right investor for you. Those who are investors prefer to invest in the right place in the industry of their choice. Investment bankers can help you in this task.
Prepare Your Presentation
After identifying your investor, you have to prepare your presentation. How much money is required for this? Why should How will you spend? And prepare answers to questions like how much the investor will get the return of the investment.
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Apart from this, prepare to give many more information about your business model, team information, product and technology information, etc. in the presentation.
Preparing To Convince The Investor
Practice well how you will talk to the investor, how you will give your presentation in front of him. When you go for a meeting with the investor by practicing it well, then your chances of getting the investment will be more.
Term Sheet
When the investor is completely convinced of your words, then the term sheet is prepared. Some important things are written in this sheet, such as how much money the investor will invest, how it will be given, what will be the share percentage of the investor, what will be the rights of both the parties.
Due Diligence
Whatever you have told the investor so far, the investor gets ready for investment on the basis of the available documents. But in this the investor or his team will come and check your documents, understand your business process, evaluate your business model, check your finance related documents (profit and loss, balance sheet etc.).
Shareholder Agreement
The share holder is much longer than the term sheet, as everything is mentioned in detail in it. It contains detailed information about the rights, duties etc. of both the parties.
Investor Relations
In this, you have to send your investors your growth reports and documents related to the company from time to time. Along with this, if you need new investors, then you can also send all these information about your company to them.
