#4 — Trailing Revenues
One of the most compelling parts of your fundraising pitch will be to show you have generated substantial revenues. Investors want to determine if the “dog will eat the dog food.” In other words, will customers buy this product at a high enough price to create a profitable company?
Boasting substantial revenues is important because it tells the following story:
• You already have a product/service in the market. As explained in #3, most investors prefer not to invest in a company until the product development is sufficiently advanced where the product or a prototype of the product has been shown to customers. (Of course, there are some exceptions.)
• You are focused on sales & marketing. Entrepreneurs often understand products, technology or finance, but have little understanding of sales and marketing. Investors want to know entrepreneurs understand the importance of sales and marketing and have management team members focused on making sure customers get what they want.
Just think, it may be that you don’t have to raise any money because your sales revenue is sufficient to fund your growth!
