Charlotte Cramer, 24, and Davide Russo, 26, recently got a $US20,000 loan from Virgin Startup, a not-for-profit company founded by billionaire Richard Branson that provides entrepreneurs in England with the funding, resources, and advice they need to start a business.
In the early stages of launching theirs, Cramer and Russo, who cofounded Glow Away, a glow-in-the-dark duvet cover for children, realised they desperately needed all three — especially the money.
After spending months researching, planning, and sourcing designers, suppliers, and distributors, the duo came the realisation that setting up their business wasn’t something they could fund themselves, Cramer told Virgin.
“Whilst looking into small business loans offered by banks we came across Virgin Startup and, given our admiration for the Virgin brand (and the great rates and mentoring they offer) decided to apply for funding,” she said.
“We were thrilled to hear that Virgin Startup [was] interested in our product and we were assigned a business advisor who helped us refine our business plan and financial forecasts.
“It was great having someone that didn’t have an emotional involvement with the idea as that really helped us dissect every part of our strategy.”
She said they soon had a final business plan and financial forecast to send off for approval — and a few weeks later, the $US20,000 was in their account.
“It was a pretty scary but amazing feeling seeing [the money] in our bank account: our creative project that we felt so passionately about was suddenly very serious.”
Cramer and Russo say they did three things in particular to get Branson’s Virgin Startup to loan them the money:
1. They created an excellent team.
“People often say that the most important thing investors look for is the team,” Russo tells Business Insider. “Now we know why.”
First and foremost, says Russo, you have to have cofounders who work well together.
“You’ve got to team up with someone you would literally trust to raise your child,” he says. “If you’ve got someone to laugh and cry with through the manic hysteria then it will keep you going, and there’s no substitute.”
You also need to find a team that brings the right mix of skills and experience.
For instance, Russo had a great deal of entrepreneurial experience, while Cramer had experience in an ad agency.
“This gave us confidence that we had the business and creative skills necessary to make this happen,” he says. And that confidence helped them get the investor on board.
2. They were careful with all the advice they received.
“To be investable you need to be able to explain every decision that your business has made,” says Russo. “If you don’t believe in it, neither will your investors. You have to own your decisions.
“Make sure they’re not someone else’s. Everyone will offer you advice.”
Your mother, your grandpa, even the postman (if you chose to tell them about your project) will offer their two cents. “And they mean well, of course,” says Cramer, “but the trick is to be smart with advice.”
Russo adds: “We had a lot of people suggesting we should look for investors, give away equity, or develop a different business model. But we had already learned the hard way that it’s best to trust your gut. So we decided to go after Virgin instead of looking for investors that would want 30% for $US80,000 and stuck to our original plan.”
3. They brought their product to life.
“The more ‘real’ something feels, the easier it is to get excited about it,” says Russo. “When meeting potential investors, you need to try to bring to life the gravity of the problem and what the solution — your idea — looks like. You’ve probably been obsessing over every angle of your idea for every waking moment (and sometimes even in your dreams), so share that information with potential investors.”
However, the challenge you face is that the person you’re asking for money may have absolutely zero interest in the problem that your idea is trying to solve, Cramer adds. “They may have never even thought about it. They might not even believe that it is a problem.”
So your mission is this: You’ve got to get them as excited as you are about your idea.
“How do you do that? Stats, quotes, drawings, and prototypes,” she says. “Go crazy, maybe even make a scrap book. Make your obsession infectious.”
Russo says he and Cramer made it tangible for the Virgin team with a lot of research and facts.
“We got there with a whole analysis on how big the problem was and what the duvet and character would look like. So we had a great research and an eye-catching prototype.”
Cramer and Russo say the money from Virgin is being spent on funding (which includes manufacturing, shipping, and design) and marketing their first batch of 500 duvets.
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.