Questions Utah businesses should remember about investment

Securing investments in your company is often a route to greater success, but finding the right combination of capital and business planning does remain elusive for some. The varied approaches to getting investors involved can be a challenge to navigate.

To that end, we were intrigued by a Utah Business story written by a leader of one of the state’s venture capital firms. In this account of his own life in the investment world, he posed two thought-provoking questions that investors ask and that business leaders should be aware of: “What do we have to believe?” and “What if this works?”

Making sure all the pieces align for your business is important, and if merchant services are something that you need to strengthen, First Utah Bank has some solutions for you.

Utah’s current excellent business climate

Before we delve into those key questions on investment, it’s important to note that the world of capital finance has fixed its gaze on the Beehive State in general, and this is after several years of being a leading state for new ventures.

Case in point: a story in July on CNBC that touted the top states for business. Utah was No. 3, just behind Virginia and North Carolina at No. 1 and No. 2, respectively. The three factors that rated the highest in the media company’s rankings were the overall economy, infrastructure and business friendliness.

The site notes that Utah’s GDP growth in the first quarter of 2021 was 9.2%. It also holds a top corporate tax rate of 4.95%, and two AAA ratings for bonds from Moody’s and S&P. These, in particular, are factors that make the state attractive to potential investors.

Questions that investors may have about any business plan can present challenges. With that in mind, Ben Capell’s experience as managing director of Peterson Ventures speaks to what they ask. It’s valuable advice for any business owner who is hoping to secure more funding to either start up or continue progress.

The world of risk vs. reward

Let’s go into detail about the first question Capell explores: What do you we have to believe? For him, it’s the core objectives that a company has to accomplish before it can take on more investment. These vary according to each company, but it’s scrutiny of those elements that always gets his attention.

Capell also said that investors “look at the longer-term, big-picture items that will have to happen for the company to have an outsized impact in the space they are operating.”

He gave an example of a life insurance company that wanted to make online purchasing — not the norm at all in that industry — a focal point of their business. He notes, though, that there were questions on the company delivering on an underwriting model to assess insurance applicants in real time. Also, their business model looked to outside carriers, and that seemed too risky instead of handling it all in-house.

It’s his second question that intrigues us even further: What if this works? He explains that it’s a realization when the opportunities are greater than the risks involved. To use his example above, his company did end up investing in the online insurance firm, as it answered those nagging questions above. And now it’s worth billions.

What Utah business owners should think about, though, is that investors don’t get it right every time. 

“We miss on key risks or even if ‘what we have to believe’ becomes a reality we may come to realize we have overestimated the market opportunity,” he writes. “But, when the combination of great execution, industry tailwinds, and big market opportunities come together it is a wonderful thing to behold.”

His advice for business owners is to pre-identify the “what you have to believe” factors and start working on answering questions about potential risks. As for “if it works,” that’s also something that takes some homework and strategy for any business owner. 

“Help investors see the vision of what this business could become despite the obstacles that might be in your path,” Capell advises. “ In doing so, you’ll help investors get conviction around your business idea and increase your chances of not only raising capital but finding a partner committed to helping you realize the potential of “what if this works.”

Merchant services offer better money management

As you attract more investment and your business gains traction, it’s critical to be able to accept payment from your customers most easily and conveniently possible. For merchant services, First Utah Bank and our partner Select Bankcard — another business from Utah — allows you to accept electronic payments from the internet or mobile, as well as at retail locations.

Having a merchant account can yield some excellent benefits for businesses, including providing customers convenient, flexible ways to pay for your goods and services. Accepting cards through online means also can streamline transactions, allowing for improved cash flow forecasting and management. There are also fewer instances of bad checks, avoiding the expenses and inconvenience that occur when a check bounces.

For location shopping, there’s also Clover Station, a system for accepting electronic payments with a fast-as-lightning processor, end-to-end encryption and data tokenization, and acceptance of chip, magstripe, or contactless payment methods.

Learn more about merchant services and how they can help strengthen your business at our website.