Equity Funding (Dos and Donts: 7 Points Cheat Sheet for Equity Funding)

In our last edition, we had discussed about the basics of funding (http://ca4you.in/blog/2016/04/19/funding-for-start-ups/) and Debt Funding (http://ca4you.in/blog/2016/04/25/debt-funding-dos-and-donts-7-points-cheat-sheet-for-debt-funding/)

In this article we will discuss about basic requirements for Equity Funding

1-    Register New Company with proper attention to having Core Team as Directors. Lot of entrepreneurs make their spouse (who is not part of the core team) as Director/Shareholder of register Private Limited Company. This is not the right thing to do as Venture Capitalist looks at the team as their main criteria to invest

2-    All the compliances of your Private Limited Company Incorporation Online should be up to date. This gives investors an impression that you mean business

3-    The IM/Business Plan has to be of “Top of the Class” (They are your only asset) and if making presentation is not your forte, go for consultants. The business plan has to be very clear on Marketing Strategy, Future Expansion, USP etc. etc. What investors look for is how scalable is your business (i.e. how big is the market you are targeting?)

4-    Get Online Business Registration for all your vendors and also do the same with your clients. Investors check your current list of vendors and clients

5-    Have fair expectation of the valuation you are looking for and have reason (good enough to asking for the valuation)

6-    Look for investors who invests amount you are looking for, have interest in your line of business and are not ‘overly’ exposed in your sector. The best way to do so is to get registered to funding news sites

7-    Start looking funds for your register Private Limited Company as early as possible (Do not wait for the right time to come, This is the correct time)

Hope this article was informative. For more info visit: www.ca4you.in

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