In June 2013, Shahrzad Rafati's company, Broadband TV, closed an initial $36M investment. Here's her advice if you're looking to raise money. By Shahrzad Rafati (Founder & CEO, BroadbandTV)
There are a broad range of factors that can play a fundamental role when securing the correct investment, including: industry climate, corporate growth tracks, other significant events in the industry and the corporate need for capital.
Four Key Areas to Consider
There are also four areas of the business that leaders need to pay particular attention to. They need to have a crystal clear understanding of the strengths of
- their team
- product positioning
- market trajectory and
- monetization model.
These four areas are all incredibly important for investors. If all four are in check, the business has a much better chance of succeeding. However, don’t overlook the weaknesses within the company. Spend time to find the areas that aren’t as strong, strengthen them and get them inline before aggressively seeking funding.
Next, think big. It’s crucial that businesses seek investors that complement the goals of the company, go after investors that can drive and stick with the business through the planned growth trajectory. If there is a specific goal to grow in a particular market, work with a partner that is known for expertise in that area. If scaling is key, look at investor portfolios that show exponential growth across their businesses.
Entrepreneurs also need an investor that can access the level of funds required for the business goals, they need to have an understanding of the objectives, deep industry expertise and the ability to follow through with the level of funding required. Make sure they are large enough to back the business when needed to do so. They have to be a cultural fit, leaders need to be able to closely work with their investor and there need to be cultural similarities between the businesses.
To early-stage Canadian businesses that are looking for angel rounds there are plenty of strong angels in Canada, there isn’t necessarily a need to look overseas or to the US. The early stages are really about proving the business model, scaling the business and showcasing the soundness of the company. This has to be done alongside building the professional network that will take the business to the next level, again think big. If success will be determined by bringing major brands on board, go after them, be confident in approaching them and make the case as to why they need to pay attention. It’s these larger brands and relationships that will often bring the required credibility and proof of concept to score the more significant rounds further down the line.
In summary: leaders should build on their strengths, strengthen their weaknesses, think big, ensure that their investor is large enough to support them and that they are a cultural fit for the business.
Do you have any investment advice you'd like to share with others?
About the blogger: Shahrzad Rafati is the founder and CEO of BroadbandTV Corp., a leading digital entertainment and technology company that operates one of the world’s largest entertainment networks on YouTube. Shahrzad is one of Fast Company's 100 Most Creative People in Business. Image credit: Jeremy Lin via Flickr.