Whether you are a startup or an established mature company, by now you may have realized that cash is the lifeblood of business. Without it, you reach the end game of your business.\r\n\r\nRaising capital for a startup has always been challenging. However, in this modern age and time, you are not restricted to traditional banks or your rich uncle to finance your business ideas.\r\n\r\nThe internet and technology have opened up multiple opportunities to find diverse and viable funding options. But, unless you have a definite plan and a roadmap to follow, you run a risk of wasting the opportunities you have.\r\n\r\nYou must know what your funding options are and points to remember for approaching investors.\r\nMost Common Methods Used To Raise Capital\r\nBusiness Loans\r\nBusiness loans from traditional banks are one of the common methods of obtaining capital. If you need larger investments for expansion or acquisition, you can get a long-term loan. But, if your need is small and immediate, a personal loan for business is perfect.\r\nBusiness Credit Cards\r\nIt\u2019s the easiest way to get finance. These cards can be helpful as a last resort. They have high-interest rates and that\u2019s why they have to be used with caution. Otherwise, it is a debt trap.\r\nLine of Credit\r\nIt is a rather flexible option. With the evolution of fintechs, getting an unsecured personal line of credit for business is not only easy but cost-effective too. Personal loan interest rates are comparatively cheaper through online platforms than through traditional banks.\r\n\r\nThe best part of having a line of credit is you can withdraw money whenever you want and for whatever reason. As you pay back, your credit line replenishes allowing you to withdraw more up to your credit limit.\r\nAngel Investors\r\nThey can be your family, friends, acquaintances and could be someone you found through online platforms. Angel investors do not have deep pockets. They can provide you with a small capital to get your startup off the ground.\r\nVenture Capital (VCs)\r\nThey are big investors. They\u2019ll only invest in a startup if they see the potential of it becoming successful and profitable. They are likely to have a significant chunk of equity in the business.\r\nCrowdfunding \r\nThis platform solely works on the power of social media. If you are able to create hype and get people excited about your business idea, you can raise capital for your business. But, you need to provide something in return. It could be your product prototype or something as simple as a thank you note.\r\nHow To Reach Investors?\r\nBefore you venture out to raise capital, you need to start thinking from the investor\u2019s point of view. This is the key to raise funds successfully.\r\n\r\nInvestors are busy people. So, if you want to get a real shot at getting the capital you need, you have to be investor ready. It essentially comes down to the below-mentioned points.\r\nPrepare your documents\r\nYou\u2019ll need two pieces of material:\r\n\r\n \tInvestor Pitch Deck: It\u2019s the first communication you send to the investor and it\u2019s approx. 10-page presentation.\r\n \tBusiness Plan: It\u2019s an in-depth document that will outline everything about your business \u2013 from history to vision\/mission, from strategies to exit plan \u2013 it will have it all.\r\n \tProvide investment-ready material\r\n\r\nYour documents have to be well-structured so investors can read and understand immediately.\r\n\r\nDon\u2019t make them refer to your website for more information. If you do, no matter how good your idea\/project is, it is sure to get a \u201creject\u201d stamp.\r\n\r\nYour business plan and pitch deck should have all the relevant information they need to make a decision.\r\nCreate a strong business plan\r\nThe business plan is the blueprint of success for a startup. It must be solid. It should include research, operations, marketing, investment, and exit strategies, and all other items that are essential for a business to succeed.\r\nHave clarity on strategy\r\nYour strategies need to be well-thought and based on solid research. Because it matters. Investors can immediately gauge the potential of your business plan. If you have not thought it through, you will fail to impress the investors.\r\nValue your management team\r\nIt\u2019s important, because investors pay a great deal of attention to the management team, their personalities and the experience they bring to the table. Do not underestimate the power of human resource.\r\nKnow which investors to approach \r\nIf your business doesn\u2019t have scalability potential, you may want to approach only certain types of investors. If your business has the potential to scale up, VCs are perfect investors.\r\nKey Takeaway\r\nAn investor\u2019s decision to invest or not to invest will depend upon how investment-ready you are. Your potential investors need to know that you have done your homework through the documents you present to them.