Updated: Nov 1, 2022
Before you jump into the fundraising process, be sure you are ready for funding.
There are many types of funding. Finding the one right for your business is important, and know when you are ready for funding is more important. Raising funding too early can result in detrimental for you as the Founder and for your business.
On the other hand, if your business is ready, a funding round can be a game changing, something that can take your business to the next level. However, not all startups are ready for that. An idea might feel exciting and promising when you're running it on your own and an investor will find it very attractive, but not every startup is ripe enough to get funding.
What steps should I take to prepare my company for funding?
#1 - Know Your Numbers
Before approaching potential investors, you should have a strong understanding of your company's financial situation. This means having up-to-date records of your revenue, expenses, and cash flow. Knowing your numbers will not only give you a better idea of how much funding you need, but it will also make you more prepared to answer tough questions from investors.
#2 - Explain more
A well-thought-out business plan is essential for attracting investors. Your business plan should include detailed information about your company's products or services, target market, competitive landscape, growth strategy, and financial projections. Putting together a comprehensive business plan shows that you have a clear vision for your company and gives investors confidence that you know how to achieve success.
#3 - Build a Great Team
Investors want to see that your company has a solid management team in place. Having a strong team with the right mix of skills and experience will instill confidence that your company is capable of executing its business plan and achieving long-term success.
#4 - Create a Pitch Deck
A pitch deck is a visual presentation that provides an overview of your company and business plan. It's typically used when pitching to potential investors and should be designed to capture their attention and get them excited about investing in your company.A pitch deck is a visual presentation that provides an overview of your company and business plan. It's typically used when pitching to potential investors and should be designed to capture their attention and get them excited about investing in your company.
#5 - Build a Scalable Solution
All investors want to invest in businesses that are solving real problems for customers who are willing to pay for their problems to be solved. VCs are looking to invest in businesses that will give them 10x or higher returns, so be sure to prove that the market is large and growing. Anything that is likely to deliver below this multiple, is deemed to be a lifestyle business - great for the Founders to fulfill their purpose and desire, but not big enough to attract the attention or funding from a VC.
#6 - Be Ready For Due Diligence
Once you've secured funding from investors, they will likely want to perform due diligence on your company before finalizing term sheets or drawing up binding legal agreements.
Founders are driven by passion, but investors by return on investment - sizeable returns, hence only a few get funded. Fund managers need to invest in startups that will give their LPs a return - it’s really that simple.
So, if you need help in any of these areas, feel free to reach out and book a session.
If you're ready to raise you seed or series A round, check out our fundraising programme.
Published for the first time on https://investable.business,