As a first-time founder, fundraising can be demoralizing, however, the task becomes an easy one to face when you select an appropriate approach to tackle it. In this article, we have outlined some fundraising tips that first-time founders can implement when trying to secure funding for their businesses.
Ensure your business plan is effective.
Before reaching out to potential investors, it's crucial to have a well-constructed business plan in place. This plan should detail the market problem your business is addressing, your target audience, market analysis and competitive landscape, your product and its unique selling points, financial projections, marketing strategies and an outline of how the raised funds will be utilized. This will not only pique the interest of investors but also instil confidence in the viability of your business plan.
Build an effective team
Asides from having a solid idea, investors are also interested in the capability of your team to bring the business plan to life. Ensure that your team members have the relevant skills and experience that are necessary to execute your business plan. Prioritise diversity and inclusion to help you have different perspectives, ideas and mindsets that can contribute to making your business even more successful.
Create your cap table.
A cap table is a record of who owns what in a company. It is a core database of the most important part of your startup: share ownership. As a first-time founder, you probably have a list of people who form your business ownership team and need to be clearly articulated on a cap table. Raise helps you ensure that you have a clean cap table for your investors and is also a way for you to store & share high-value data and information for your investors.
Network within the ecosystem
The startup ecosystem is often a welcoming one. As a first-time founder, your priority should be networking with people within the industry to help you get your business in front of the right set of people. Networking early will help you build the right relationships with other founders, investors and key industry players. Seek networking events within your community early, and register and attend these events. Prioritize LinkedIn as a networking tool to help you expand your network and meet more like-minded individuals.
Prepare your pitch
Networking properly helps you get prepared for a pitch. Create a clear and concise pitch deck that articulates your business plan for an investor. During your networking opportunities, have your pitch deck ready off the top of your head and also in digital/printable form. Always have a list of scenarios- such as questions that might likely be asked and practise producing the right answers for these questions. Be knowledgeable about the key data and emerging trends within your industry. Lastly, be prepared to meet with likely investors and have a desired figure in mind, also be ready to negotiate investment terms.
The fundraising process can be incredibly daunting and time-consuming. Try to remain persistent and focused on your desired results. Be flexible and embrace feedback and constructive criticism from your peers and also the investor network. The feedback your receive can be highly important to help improve your business plan and make your business investment-ready.
In conclusion, as a first-time founder, fundraising can be quite challenging however if you have a great business plan, an effective time, a great network and a quality pitch, you can increase your chances of success. Always be prepared and stay persistent. Ask questions & ask for help where necessary. Good luck!