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Seeking Investment For Your Startup? Do Your Homework First It goes without saying: whether you're looking for seed, angel or VC funding, you need to be prepared.

By Jon Richards

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

When is the right time to start seeking investors? That's a question lots of digital businesses ask themselves at some point, and also a question I have been asked a lot recently. The answer I always give is; there is no right or wrong time. It's very individual to every business. Unless of course you have less than six months cash in the bank and you're still not profitable! When it came to our angel round, we needed to go from working on the site part time to being full time. For us we had two choices; we continue to grow organically and retain 100% of our business, or we take external investment and turn the dial to 11. We opted to take the angel round and things went crazy from there.

Around eight months after our angel investment, we decided the time was right to seek VC funding. We had demonstrated our ability to execute and had delightful charts showing our revenue growing month on month. Again, we reached the stage where organic growth was very good, but the potential was far greater and the only way we could realise that potential was to take VC funding.

Getting VC funding isn't just about an injection of money, although obviously that's a huge plus. The knowledge and connections VCs bring with them (if you choose wisely), will also help in the next stages of growth and could aid an eventual exit- if that's your plan.

It goes without saying: whether you're looking for seed, angel or VC funding, you need to be prepared. Don't even think about contacting anyone unless you've got a deck, budget and a business plan. Your deck should give potential investors an overview of your company, industry, past revenues, current run rate, competitors and a brief overview of how you plan to spend the money. Potential investors will also want to know about your team, your tech, your background and company structure.

Image credit: Shutterstock.com.

Once you have all this, a simple Google search will highlight the active investors, these are the guys announcing funds, releasing press releases about recent investments and talking about the local tech scene. In my experience, if the investors have funds to deploy and you have a good product, they will want to hear from you.

Before speaking to investors, make sure you have a strong understanding of your market and can demonstrate why you're the right person to take advantage of the opportunities. Beyond the product, investors have to like you as a person so going in strong with an "I'm amazing' attitude is likely to you get you removed from the room pretty quickly. Unless, of course, you're sitting on the next Snapchat. As for my approach, I was humble about my success, bullish about the future and open about my strengths and weaknesses.

Lastly, make sure at every stage of the process you are trying to close. You won't close the investment at the first meeting, but you can close them on when the next meeting or call will take place. Each investor will have a different turnaround time, so you should always ask them how long it typically takes for them to reach a decision.

Throughout the process, agree dates and times for each step so everyone knows where they stand, what's expected of them and when. That will help keep things moving along and gives you the freedom to chase them.

Of course, expect all the above to go firmly out of the window as you add more investors to the round! From experience, getting three VC's over the line is like herding sheep- but, in the end, you'll have more support, more contacts and potentially more money.
Jon Richards

Co-founder and CEO, yallacompare

Jon Richards is the co-founder and CEO of yallacompare, the leading finance comparison site in the Middle East.
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