..

Business News

  • Written by Elizabeth Price

How to Get & Control Business Investments As a Student





As an young entrepreneur, getting investors interested in your business must be an absolutely crucial part of the planning process. Without having the audience that would use a certain product or service it would become extremely difficult to find potential investors.

Getting the attention of investors might seem especially tedious if you are a student. Yes, you might have brilliant ideas. Yes, you might be familiar with the market trends. But how to replace the lack of experience and successful projects behind your back? Here is what a student entrepreneur needs to know to create an attractive business for investments.

Define the Niche

Before finding anyone to invest in a business idea, you need to define and understand its purpose. It is important to evaluate what your startup needs and craft a realistic setup. Normally, business investors are looking for someone with a comprehensive business plan, that understands overheads and how to sustain a company.

While choosing a particular niche for your business, remember to check its’ competitiveness and starter difficulty. Naturally, one will need a large amount of funds if they are trying to open a brick and mortar location. Alternatively, online shopping platforms displayed on social media via a link in bio might not need as many funds initially.

Another crucial thing to keep in mind is the segment of your potential customers. In most cases, people will start a business that they feel they would follow and support if they were customers. For instance, many of your fellow students whim about lacking time and motivation to complete their hometasks. Offer them a solution. From now on, your company will handle all “write my essay online” requests. Both you and your colleagues are in perfect order, right? Other prospective ideas for student startups include businesses built around coffee machines, clothing and gadgets, - it is up to you what to choose.

Networking Is the Key

The importance of networking as an entrepreneur can’t be overstated. It’s absolutely crucial that entrepreneurs try to meet others in their field, especially those that can help them grow.

When discussing the investments specifically, it’s best to approach investors with another professional to vouch for the company. This way, the investor feels like they aren’t taking as much of a blind risk.

To network, the first method is to attend networking events. At these events, ask others questions about their business to discover more about current eCommerce trends. In addition, take the time to help these connections at every opportunity. The more reliable you are, the happier they’ll be to work with you.

E-commerce for All Generations

It is not an unknown fact that HR departments are going through something these days called ageism. To be more exact, companies are looking exclusively for employees within a certain age group.

One of the largest benefits of online businesses is that if one has the tools to develop such it is always an available option regardless of their age. New e-commerce companies usually deal with fashion, traveling guides, online product reviews, healthy foods and drinks ( either delivery or help with a dietary plan), sustainable businesses and quality leisure products (coffee, tea, etc.).

Now that we have the understanding of the fields that benefit e-commerce the most it is time to take into consideration one of the most significant factors: funding. The traditional routes are still available such as using your own personal savings, credit cards, peer-to-peer loan or asking friends and family for help.

Alternatively one may look into the ways of obtaining a traditional bank loan, SBA ( Small Business Association) Loan, crowdfunding and venture capital. Despite having so many options available, this article will mostly cover how one can secure different forms of venture capital investments.


Forms of VC Investments

One of the ways that young entrepreneurs can pursue to gain funds for their startup is through venture capital (VC) firms. These firms are made up of investors who typically work on the behalf of individuals looking to grow their wealth.

To gain a VC investment, take a look at the VC firm that you are interested in and get to know what they want. Many VC firms specialize in a certain area. This might mean they only work with brand new companies, companies in a certain location, or within a certain industry.

Once an entrepreneur has found a VC that fits well with their company, it’s all about crafting the right pitch. Here, it’s important to put your business is in the best light possible. You’ll want a good elevator pitch for meeting the VC.

After this, comes a somewhat lengthy negotiation process. This, at the most basic level, can include deals regarding what the investor gets out of the business and how this will affect the company owner.

There are a few different forms of investments that a VC might offer an entrepreneur:


Convertible promissory note. This is a note from the company to the investor that promises the note can be converted into stock. The maturity dates of these notes are usually a year with a 4%-8% interest.

Simple Agreement for Future Equity (SAFE), is another alternative. With these, an investor invests cash in a company which, in the next financing cycle, converts into stock. Unlike convertible promissory notes, these aren’t interest bearing and don’t have a maturity date.

Finally, there is a convertible preferred stock investment. This gives an investor the chance to not only potentially convert this investment into common stock but preferred stock gives an investor preference over common shareholders.


Watch Out for Aggressive Investors

As an entrepreneur, there may come a time when you want to sell your company to investors. In some cases, this can go extremely well and the entrepreneur bows out with a hefty paycheck. In other cases, the entrepreneur pretty much breaks even - not a fate that most entrepreneurs want.

However, there is also the concern of accidentally bowing out of a company. This usually happens when the investor agrees to sign a legal contract confirming that while funding the business, the initial owner reduces or even nulls any ownership the entrepreneur has in the company.

The best way to avoid this is to consult a lawyer before signing legal documents. While an entrepreneur might be talented in business, most aren’t versed in legal terms. As such, calling on a professional in the field can go a long way in protecting your ownership.

Final Lines

The help of an investor can be a great chance for a new business launched by students. Not every investment holds the same value, though. To get the most out of the investment being offered, make sure to be careful. Create a business plan, consider the benefits and the risks before taking the leap and wait. Wise investments pay off.

Why Branding is vital to your family owned business

Once available only to large corporations, branding is now more accessible and vitally important to every size (and type) of family business, including yours. But what is branding and how does it ...

Stella Gianotto - avatar Stella Gianotto

Statewide Super announce Tony D’Alessandro as CEO

Tony D’Alessandro Tony D’Alessandro will be the new Chief Executive Officer of Statewide Super, effective 1 March 2019. Mr D’Alessandro will replace Richard Nunn, who in January announced his ...

Media Release Service - avatar Media Release Service

Why ‘Handover Culture’ Doesn’t Exist in Australia – And Why It Should

Handing over a business to the next generation might seem like something that can wait, but Australian business is largely unprepared for succession – and that’s a problem.   Handover culture is t...

Andrew Williams - avatar Andrew Williams

Officeworks sponsors disadvantaged school kids with The Smith Family

RECORD-BREAKING SUPPORT FOR STUDENTS IN NEED THANKS TO OFFICEWORKS 2019 BACK TO SCHOOL APPEAL  As a new school year gets under way, more than 1000 students will have access to the education essenti...

The Smith Family - avatar The Smith Family

Consumers have had enough

Recently we have heard Ken Henry NAB Chairman state that “it could take 10 years” to change the Culture of the NAB to be one that is more customer focused. But if you go into one of the branches, the ...

Justin Herald - avatar Justin Herald

Peppers cuddle up to the Noosa Koala Habitat Recovery

Peppers Noosa Resort & Villas has strengthened its ongoing partnership with Noosa & District Landcare Group (NDLG) by extending its arms to support Noosa’s cuddliest residents through a uniq...

Nyarai Chapingidza - avatar Nyarai Chapingidza

Politics

Prime Minister interview with Alan Jones

Good morning Alan.   ALAN JONES: Thank you for your time. Could I just begin by saying that politicians rarely get praise. I have been speaking to farmers during the course of the weekend. You wen...

Alan Jones - avatar Alan Jones

Scott Morrison on Shorten's Border Protection backdown

Border Protection   PRIME MINISTER: Less than 24 hours ago, I warned Australia that Bill Shorten would make Australia weaker and the Labor Party would weaken our border protection. That they could...

Scott Morrison - avatar Scott Morrison

Funding to support women and children escaping domestic violence

Hundreds more women and children escaping domestic and family violence will have a safe place to sleep with a $78 million investment by the Morrison Government.   This investment includes a $60 mi...

Scott Morrison - avatar Scott Morrison

Travel

Fun Things You Must Do In Perth

Perth: Sun, sand and 19 beaches might seem to sum up the city, but not quite. The sunniest capital city in Australia offers so much more for you to do. Regardless of what your idea of fun is, you wi...

News Company - avatar News Company

ex-HMAS Tobruk dive site Fraser Coast

Fraser Coast Has a New Sunken Treasure for Divers to Explore A rush of scuba divers from around Australia is expected to begin exploring the underwater wonderland created by the ex-HMAS Tobruk after...

Tracey Joynson - avatar Tracey Joynson

3 Steps to Make Your Dream of Working Abroad Come True This Year

Oh, the New Year. The time of year when anything seems possible and everything seems doable. For some people, nothing will change over the course of the next 12 months. For others, everything may. I...

Bevan Berning - avatar Bevan Berning

You might also like