co-workers preparing a pitch for startup funding

Practical tips on obtaining funding for your CPG (Consumer Packaged Goods) startup.

 

Asking for money can be a tad uncomfortable, but securing funding is part of running a business—especially for a CPG (Consumer Packaged Good) startup. Investors are a normal part of the process, as is asking them for money.

However, asking the right way increases your chances of success. The more professional, confident, and informed you come across to your investors, the more they’ll believe that  investing in you will lead to success—for you and them. This article will outline practical tips and advice to help you get the funding you need. 

Be transparent.

It’s important to embrace transparency when asking for funding. Establishing a trusted relationship with your investor from the beginning is crucial if you want a mutually beneficial (and mutually lucrative) long-term relationship.

Put yourself in the investors’ shoes.

Begin by anticipating your investors’ questions and make notes of those answers. Then, you’ll be equipped to answer any questions that arise, showing professionalism and that you’re well-prepared. For example, what problems or challenges does your product solve? Whom will your product help? Why is your product better than other products already on the market? Why should your investor take a risk with you? And how big a risk should they be willing to take?

Tell your story with passion and authenticity. 

If someone is going to invest in you—brand, company, product, or business—they want to know about the person behind it. Be compelling. How did you get to this juncture? What are you passionate about? Why? Knowing your backstory gives your investors a stronger connection with you and, as a result, a deeper understanding of your goals.

Solve a problem. 

Do this well and do it better than the others. Prove to your investors that your product or idea is superior to your competition by clearly outlining the challenge(s) it overcomes. Use examples and be specific. 

Crunch the numbers and show your worth. 

Your investors need to know this so they can determine whether to give you money and how much. Help them understand how much return they could see on their investment and in what realistic timeframe they should expect to see their return. What’s your exact company valuation? How profitable are you now? How profitable do you aim to be in the near future? What’s your goal for market share? When do you intend to achieve that goal? 

Share the in-depth plan.

 Showing up with a tangible plan shows professionalism. Consider your goals and objectives. How will you achieve them? What is your mission statement? Do the research and prepare for growth. Drive that momentum forward. Give your investors a concrete market analysis detailing your company’s potential. What are your revenue projections? The more details included in your business plan, the more impressed your investors will be. 

Be low-risk, and prove it.

 Investors are more likely to fund low-risk businesses, but they can’t be expected to just take your word on it. Do your due diligence and provide them with overflowing data regarding all your financial obligations. Remember, there’s no such thing as zero-risk. Your goal is to be low-risk and being transparent about the risks you do have will help show that you’ve considered and prepared for them. What are the plans when (not if) something unexpected occurs? 

Keep it real. 

Don’t be hyperbolic. Be specific. Aim for your target audience and not the entire marketplace. Sure, it’s fun to dream big and have ambitious goals, but be realistic about it. Be enthusiastic. Be vulnerable.

Investors appreciate a detailed exit strategy. 

How will you react if or when your business is bought out or sold? Are you flexible? What’s your endgame? Plan for the long-term versus the short-term. 

Here’s one last thing to encourage you.

Investors love having these conversations… 

Because they love funding new innovations and better ideas, that’s why they’re in this business in the first place—just like you! When you approach them knowing that they enjoy being helpful resources, you can see how you share a vision of the ideal outcome. They want to invest in your success, so you can be confident in starting that conversation.

As we wrap, we have one other investor to consider… us! The P&G Ventures Studio tailors each relationship to the unique needs of each startup. As a startup studio, we go beyond funding and provide the resources, expertise, and solutions you need to be a market success for many years to come—all backed by a partner with 180 years of brand-building expertise.

You can see what we offer by checking out P&G Ventures at www.pgventuresstudio.com.