Because Hong Kong’s startup ecosystem is thriving, competition is stiff for attracting investors for the more than 1,926 startups in the city. If you want investors to sign a check for your business, you might consider these crucial steps.
What to Include In Your Business Plan
If you don’t have a detailed business plan, then you probably aren’t yet ready for an investor. A business plan helps you think through every detail of the business. It should lay out exactly how much you need and where it will be spent to justify the money they will potentially invest. Here’s what an investor looks for:
- Market and competitive research – Investors want to see that you offer something unique that will sell. Define your customer base, their buying habits, present and potential competitors and what motivates and challenges buyers.
- Sales and marketing strategy – Carefully define the marketing spend using research-backed and a measurable tactics with numbers and data as support
- Use of proceeds – Most investors in Hong Kong come from financial backgrounds, so answering questions such as how much initial investment you will require, when you expect profit, when investors can get a return and what salary you will take home, are critical.
- Plans for expansion – Some investors consider a profitable business one that focuses on scalability, that clarifies its plan for growth and one that looks beyond Hong Kong.
- Professional-looking plan – An investor wants to see that you’ve spent careful time with the plan. Consider hiring a graphic designer to help it stand out. Try to use visuals to bring clarity.
- Executive summary – Investors who gets tons of business plans often reads the executive summary to determine if reading the full plan is worth it. Aim to be clear, concise and engaging.
- A realistic contingency plan – This often overlooked section is one that answers the likelihood of business failure and what happens if it does.
Keep in mind, though, that a good plan by itself isn’t enough to attract an investor.
Seek Investors in the Right Places
There are many resources that connect startup entrepreneurs with investors. It would be wise to do your due-diligence and make sure you’re using every available resource and network. Here are a few examples:
- iStartup@HK – This portal provides resources to help get established and acts as platform for virtual pitching and networking.
- Accelerator and incubator programmes – There are startup accelerators and incubators as diverse as the industries and verticals startups represent. Find the right one for you.
- Hong Kong Business Angel Network – This group hosts incubation for startups and investment matching gatherings for entrepreneurs to present business plans.
- Large businesses provide support – Many large companies have programmes to help entrepreneurs, such as Alibaba Entrepreneurs Fund.
How to Get Noticed
If you spend all of your time seeking investors, you might be overlooking ways to help an investor find you. Here are some ideas to help them find you:
- Co-work – There are more than 40 co-working spaces in Hong Kong that offer services to help you grow, network and connect to resources.
- Networking events -Investors are looking for you just as much as you are looking for them and are always at events, such as Startup Weekend, Startup Grind or Garage Society. Go without planning to ask for money but have your pitch ready.
- Marketing – Blog about your business to help investors to see inside your company. Share your posts on LinkedIn, which is similarly a great tool to use for finding investors
Finding a partner for your startup can be overwhelming, but if you use all available resources it doesn’t have to be.