When a business wants to use external financing, it is ready to develop new products, expand its production, and access new markets. Many companies ardently desire this, representing an essential step in long-term sustainable growth. But everything is not milk and honey. A business must be prepared to access external financing – from the company’s management to the ability to access the funding in terms of resources and sustainable plans.

What does it mean to be investment-ready

According to the Energy Catalyst „Investment-Readiness” Guide, investment readiness means „the capacity of an enterprise to understand and meet the specific needs and expectations of investors.” This determines whether a business receives financing or not. Two essential things influence investment readiness: the viability of the business and the quality of materials for investors.

Business viability

This is the duty of the business management, which has to prove to the investors that the business is a sustainable organization. This is shown through a bold business model, a unique value proposition, and a team with solid knowledge and the desire to show this.

Materials for investors

This is about the materials you make available to investors: business plans, financial models, investor teasers, and memoranda should be solid and make a compelling case for investment in the business.

Consider the following aspects:

The preparation is specific to the round.

Always consider the specific round of investments your business wants to attract. Think that the perspective and approach are quite different when you go to friends and family versus a Business Angel.

Time it right.

A general rule about foreign investments is that you must approach potential investors at least six to nine months in advance, but this must happen when things have already taken shape and you know this is the desired next step.

It is also about strengths and weaknesses.

It takes enough time to know the strengths and weaknesses of the business. Understanding the industry and the company is essential in the investors’ decisions. Often, they invest in people. Don’t forget that.

Don’t be discouraged.

The chance of failure exists, but this should not discourage you. A good angel investor or venture capitalist will recommend you to someone else in their network of contacts or will always leave an open door for you. Don’t forget to ask for feedback and recommendations and turn that failure into an advantage for future actions.

But what can be the constraints that can lead to prolonging the fundraising process or even to the failure of a transaction?

Poor management and lack of the right skills can discourage potential investors. At the same time, inconsistency or vague and incomplete information can prolong the entire due diligence process. Plans and strategies are also essential because if they do not have strong support from behind, they can seem dreamy, therefore, unrealistic.

What about investment-ready mindset? Understand what emotional challenges you may expect along the journey

Well, here comes the fun part. As a startup founder, it is something familiar to enjoy your lifestyle while the business is growing itself, right? A 4h workday is something everyone dreams about…  The truth is a startup founder usually comes from another planet – so many skills to develop while balancing a healthy lifestyle, social inclusiveness, and a healthy emotional balance. 

Not many people know running a business demands a lot of resources, especially in the early stages, and we are not talking about human and financial resources. But energy, emotional, and time resources. The emotional state and the mindset of a startup founder directly impact the well-running of the business and its development. Here’s a short checklist every founder should be aware of about getting prepared for what it takes to run a startup:

• Emotional balance and a healthy emotional routine to support your sanity (insert smiling face)
• Self-confidence
• Positivity, and no no.. It’s not about faking positivity but digesting your emotions at a deeper level that allows you to overcome any challenges, you may face
• Flexibility and openness to uncertainty
• Creating a support system to help you thrive along the journey

Studies show that 72% of entrepreneurs have some form of mental health problem. As we mentioned before, these numbers are overwhelming because:

The toxicity of the hustle culture – a toxic environment that makes you feel guilty if you spend too much time on non-work-related things.

Unattainable standard – the pressure of overnight success stories and the buzz created around those stories come with extraordinary pressure.

One-man show – when you end up doing it all – from marketing, sales, human resources, and administration helps you feel overwhelmed. Some entrepreneurs tend to overwork for their dreams, a higher risk of burnout.

Unseen, unheard, misunderstood – a familiar feeling in the entrepreneurial world.

Start-ups are alienating – you can acutely feel the stress of a growing company and the sacrifices made all the more.

How to overcome emotional burdens

Try to prioritize your mental and physical health. How can you do this?

Destigmatizing

Talk openly about what you feel and what you think. It’s perfectly fine to feel like you can’t do it anymore. At the same time, encourage others to do it.

Be careful to have the right people around you.

Those who have gone through the same entrepreneurial journey as you can understand you 100%.

Start putting yourself first when it comes to your business.

We know that this start-up is „your baby”, but it will not work as long as you are not ok.

Don’t forget mind-body balance.

Mental, emotional, and physical well-being are closely related to each other. Pay attention to the food you eat, the mindfulness exercises, and the physical ones, you do.

Take „Me time” as often as you can

Give yourself those minutes or hours in which you do what you like.

To Sum Up

As prepared as your startup to raise financing, you must also be as prepared as an entrepreneur.

Take care that your business is at the right point to get financing – to be at the right stage, to have a long-term sustainable plan, a clear business plan, and so on.

At the same time, don’t forget about yourself—the man behind the curtain. Take care of yourself in the true sense of the word. Be kind to yourself. Learn to delimit the business from your personal life very well. The company will not work if you are not well with yourself.