When tapping on sources to raise financial capital, founders, entrepreneurs, and business owners face a great amount of challenge. It is of utmost importance for entrepreneurs to highlight the capital raise of their start-up in such a manner that they can convert their potential investors into their long-term actual shareholders.

Modeling a growth-capital raise in the mold of commercial real-estate financing is one way to do that. But to avail this opportunity for themselves there are a certain set of qualities that business owners must incorporate in their fundraising strategies. These qualities are mentioned as follows.

Disclosure and transparency

One of the most important lessons that business owners can learn is the lesson of transparency. Just like every other investor a commercial real estate investor also has their own personal preference risk tolerance level. Some are risk takers and others are risk averse. To match an investment opportunity with the most suitable investor target audience, the documents of the real estate offering typically have disclosure on the risk factors involved and the feasibility of the deal.

Focus on returns

A commercial real estate is appealing to many investors only because of it providing consistent, predictable cash flow. Because of this many sponsors clearly highlight in their offering the time horizons, projected income, and returns involved in the financing of such a loan as they are key investor motivating factors. Entrepreneurs in this case often are more hesitant in making authentic return projections in capital-raise materials in order to avoid being pinned down to investor expectations.

To make things clear business owners must define a properly planned exit strategy which will make the investors understand how exactly they will earn money from a growth investment.

Defined plans

It requires a huge amount of effort, time, wealth, coordination, and oversight for building or renovating a property. To be able to have a higher chance of getting a loan approved for yourself it is essential that you being a business owner seeking out a loan lay down a defined business plan with as much clarity as possible. Some key details include laying down the project timelines and long-term intentions for the property. This would help increase your credibility for raising capital.

Insider information

Having the knowledge of the neighborhood of the property that you are aiming to purchase would prove to be beneficial for you in acquiring the loan. This “intel” commonly includes the property values and local developments in the same area.

Result oriented

Being a business owner and looking for funding opportunity through commercial real estate financing you need to work with deal-makers who have a good reputation in the market and have a track record of success. This is the reason why many sponsors highlight the expertise of their team members and the history of completed projects to attract business owners like you to start a deal with them.