In their own mind, every entrepreneur thinks that their business is a slam-dunk opportunity for a banker or investor to consider. What an entrepreneur often fails to realize is that a banker or an investor is not as close to their business as they are. They lack the intimate knowledge of all the small details and are often left having to make a decision based on out-of-date information including financial statements that don’t make sense which is the basis of every credit decision a bank or investor makes. If entrepreneurs are serious about being approved for financing, they have to approach their request the same way they approach the delivery of their product or service to the market: with specific solutions to the problems presented. Imagine trying to sell your product or service to customers with half-baked strategies and materials.
Similar to how you invest time understanding your customer…the same investment should be made into understanding the bankers and investors you are looking to secure capital fromDylan Gallagher
There’s an old saying that bankers and investors will always want to give capital to the entrepreneurs that don’t need it. Part of “not needing it” is the presentation of a business, its need and its ability to repay or generate a return for the capital invested. It’s not what you present but how you present it that will guarantee your business is successful securing financing. Bankers and investors don’t want to become intimate with your business – they simply want to know that your business can meet their criteria. This is where you (or someone else) needs to spend time. Taking time to understand the criteria for the various banks and/or investors you are presenting to will significantly change the outcome you receive. Similar to how you invest time understanding your customer, their needs and how your product or service can be used by them, the same investment should be made into understanding the bankers and investors you are looking to secure capital from.
It can be frustrating when your business is not able to secure the capital it needs. It can be frustrating trying to speak about your business to someone who doesn’t have the same context you do. It can be frustrating to do the work to make sure the information you present is accurate and makes sense. The price of working through the frustration is getting a good deal on the capital that your business is looking for that it will leverage into profit. The price of not working through the frustration is wasted time and potentially more expensive terms for the capital your business needs which ultimately erodes your profits. Do you want to be guaranteed that your business will be approved for financing? Do the work to make sure it is.