The Essential Entrepreneur, 2nd Edition

CHAPTER 11Getting investment ready

Apart from equity and ownership questions, which I'll address in the next chapter, questions around getting ready for investment are the most frequent questions I'm asked — and understandably so, as most people don't have the funds available to get started and turn their business ideas into reality.

Let's begin by defining the different stages of developing a new business, the normal pathway of development and in general what funds are required. You'll hear terms such as ‘start-up’, ‘accelerator’, ‘scale-up’, ‘growth’ and sometimes a combination of these. People use different definitions, which can be very confusing when you're trying to work out what to do. For this reason, I'm going right back to the basics.

Stage 1: Start-up

Stage 1 is the start-up stage. This represents the incubation stage of a new business. It's taking the idea and turning it into something that can be tested or validated; developing a minimum viable product (MVP) or mock-ups that can be demonstrated; and testing it via market research to see whether it's solving a real problem, whether the timing is right and what people will pay for it. Once you're confident you're on the right track and the product design and market acceptance are good, it's then about getting engagement with a real commercial customer or group of consumers so you're ready to run a significant trial or pilot. You've de-risked the business model and have an engaging investor presentation ready to ...