You might have the best product. A sexy widget. So amazing it sells itself. Except when it comes to capital.
When you are asking for capital, any kind of capital, that capital isn’t looking to be paid in widgets. That capital wants to turn its capital into more capital.
So when the time comes, you can’t speak widget lingo, you have to speak capital. Very often this can seem like a completely different language.
The solution: presenting your business through the lens of finance.
Here’s an all-too-brief sample list of what that means:
- Explain the unit or single asset economics associated with your business, i.e. what it costs to make and sell one unit, and at what gross margin can you sell it for
- What fixed asset or overhead investments are required to sell the amount of widgets you hope to sell for whatever timeframe you’re discussing
- Present a credible outlook with a focus on the financial components critical to your capital audience (e.g. lenders care more about maintaining bottom line for leverage ratios, whereas growth equity can tolerate volatile profitability in the pursuit of top line expansion)
- Show you understand the prospective fit of the capital in terms of return potential (e.g. show growth equity a 5% return profile and it will be a pretty short meeting)
The lens of finance is a critical perspective to attract capital!
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