By Mary Jones
Starting a business of your own is nearly everyone’s dream, but only a rare few have the courage to work for it. Thanks to the fierce digital wave, it’s easier to research and work for converting your own business ideas into reality. Not just that, it’s easier to find like-minded people across the globe and also look out for sources that could be of help. In simple terms, it’s easier to face the startup challenges that were a concern just half a decade ago.
The number of startups that come up is equally interesting and scary for the economy right now. It’s a good thing for the consumer to have number of options to choose from. It’s also great to have more and more businesses that come up around the block to help bring in a better change. This is the same reason that makes it difficult for startup owners to be remembered to their investors and customers.
Every business runs on an initial amount of funding. This could either be taken from the market or by self-financing your startup. The chances of the second are highly rare. Nearly all startup owners depend on angel investors for their business stay afloat in the market. After a stage in every startup’s growth cycle, funding becomes the only aid to move forward. However, it has become extremely difficult to raise fund for an early stage startup. Investors are more conscious now and are cautiously investing in later stage startups. It makes sense when someone doesn’t want to risk his fund in a business that looks risky to him/her.
It is still very important to remember that investors still fund startups once they see the scope of prosperity. This is largely dependent on the business owner of how convincing his/her startup is.
Here are 5 mistakes you should be careful to avoid while fundraising for your startup-
1. You should try to keep the fundraising process as simple as possible
Your startup depends on this funding and you want to give it your best shot, agreed. However, going out of the way and trying to make the fundraising process seem technical, is not the right way. Its usual for startup owners to feel the pressure of booking the best of venues for meetings and use tricks to show themselves in good light. It’s important to remember that these investors have been through many such meeting and chances are high they can see through the façade if any. Your pitch is the only thing that matters to them. No matter how presentable your workplace is or how courteous you are, it is wasted if they don’t see value in your pitch.
Keep the process as simple as possible and focus on areas of your business that would concern your investor. Good hotels and fancy jargons would just mean a mere cover-up for what you are lacking as a business. Instead, encourage your investors to ask questions and try to take them on board with your idea.
2. Prepare a pitch that shows your vision
Most startup owners go on and on about the generic template in the market. The investors most probably have done their own research about the market or seen many templates like yours. They don’t need another pitch talking about the obvious market scenario, competitors and technology. Remember, the investor wouldn’t invest in your business unless he/she sees any additional value in it. Talk about what’s motivational about your business in particular or how your business is different than others. Focus more on what makes you and your business have an edge over others in the market. These are the same aspects that motivate you and excite investors too.
3. Don’t be a solo player, have stronger and coordinated teams
It’s quite appealing to take up multiple tasks and complete them with the sincerity you think they deserve. It’s called being a multitasker and a seeker of perfectionism. But this can stop you from progressing in areas that matter more to your business. This is why it’s wise to delegate the right tasks to the right people at the right time. This will allow you to focus on areas that can’t be taken over by anyone else in your business.
The investors invest in a team of people who are working towards the same goal. A well-structured team is the first asset of any business. The future of the business depends a great deal on this initial team and how they drive it. This makes it extremely important to have a team that is well tailored and is coordinated perfectly.
4. Be very careful to check your market size before pitching-
All businesses are about the gap between demand and supply. However, it’s extremely important to check how much on a demand your business idea has. Some businesses matter more to people and have a bigger market size. While some other businesses focus on a more niche market size and are comparatively small.
It’s pretty obvious for your business idea to feel and look appealing to you. But it is wise to have a reality check well before time to know how many customers you are targeting at. The chances of investors investing in a business that doesn’t earn a lot of revenue are pretty scarce.
5. Do the right networking and stay prepared well before time-
Investors know their market a little better than others. Chances are high, they have researched you well before deciding on the meeting. This is why it’s extremely important to network well in advance and know your investors. Knowing them and having a couple of references will make you feel more confident during your meeting.
Have all your documents and pitches ready, well before time. Investors have an eye for detail and their time matters to them a lot. You don’t want to keep your investors waiting while waiting for someone to fix your projector for the presentation.
There will be many more things that you will have to learn continuously through your journey as a startup owner. It’s a continuous process, yet is absolutely worth it. This is yet another advantage we have, courtesy the internet.
Mary Jones is the co-founder & editor-in-chief at TopMyGrades and focused on Content Marketing Strategy for many clients from Education industry in US, Canada & UK. Mary has conducted a series of webinars for ExpertAssignmentHelp. She has intensive content editing experience and, also has worked with MSNBC, NewsCred & Scripted. She has also authored blogs on Lifehack.org, Wn.com, Medium.com, Minds.com and many more digital publications.