• Devansh Lakhani

A guide on how to attract investors during an economic crisis!

Over the past few months, businesses have struggled in the face of covid-19 epidemic. Small and medium scale businesses have been affected the most and many of them are crumbling under the pressure. This is the time where most businesses require support and need to find ways to boost their business. Since the traditional funding sources might be difficult to give the support that is required, it can prove beneficial if you explore new ways to attract investors who are looking to grow their investments during and after the crisis.

There’s an alternative funding source out there like angel investors, venture capitalist etc who are looking for a business model that is attractive enough for them to invest in. So here are a few points that can give your business model an edge over the others to attract the investors.

1. Make sure you have a full-proof business structure

There are two basic features about a business that your investors would want to know, legal and financial structure of your business. A legal business entity even in the simplest form, can resemble the credibility and reputation of your business which makes it instantly attractive to investors. Being said that, a solid financial plan is as crucial as the legal aspect of your business. If you don’t have a sound roadmap of how your business is going to survive if in future you face similar adversities, you won’t be able to gain investors trust. It’s very important to keep uncertainty in mind and make a foolproof business structure.

2. Be flexible

We all know start-ups are all about finding a solution to a problem or are about something super-innovative. As much as these ideas give you an edge in the market, given the current crisis, we have witnessed that any business that provides essential product or service can still strive even if their product isn’t innovative it unique. To sum it up, make sure you’re open and flexible to new ideas and are willing to adapt to make the best out of any given situation.

3. Make sure you consider your employee well-being

Taking care of your employees is the new talk of the town. With the given pandemic, employees are expected to work in unconventional spaces and work through distractions. This has been known to have a negative impact on productivity. So, if you have a plan on how to take care of your employees during and after the crisis it’ll definitely attract investors attention. It shows them that you are well equipped to manage and retain talent that’ll help you grow your business.

4. Be real and authentic with your brand communication

Communication is an important tool that keeps investors, customers and other stakeholders connected with the brand even during a crisis. If you are a business that is looking to attract investors during a crisis it is important to convey your idea as clearly as possible. Investors will look at many facets of your business including how the outside world perceives your brand. Make sure you’re visible throughout the crisis by contributing to community and sharing valuable content across all your digital platforms.

Last but not the least, remember a lot of strong brands have come in existence because of crises. Since investors are going to be more careful with their investment choices it comes down to you as a start-up owner how you make the right choices along the way to your success.

About Devansh Lakhani

Director of Lakhani Financial Services, and a Chartered Accountant, he helps start-ups raise funds from his network of investors. He guides and advises start-ups to scale up by providing efficient sales, marketing, team building, and business management strategies. He has executed fundraising by block deals on the stock exchange and conducted IPOs and right issues on the SME platform to the tune of over Rs. 50 Crore. He is currently working with start-ups from various sectors to help them channelize their business models and investments.

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