FundRaising Process for Startups

Securing a new funding round is an important turning point for startups. Without funds, even the best startup founders have problems developing product prototypes, testing market assumptions, and getting enough investor interest required for future financing.

However, convincing an experienced investor that your team has the persistence and  determination to develop a next-generation product or service is no small feat. The well-funded startups know that the fundraising process requires careful research and planning. The investor presentation must show the startup’s unique value proposal, traction achieved, and how the startup is about to generate a positive return on investment.

4 Simple Steps to Achieve a Funding for your Startup

Are you struggling to generate considerable funding for your startup? Follow these simple steps to start your fundraising journey, and scale your business to all-new heights.

1. Layout Funding Goals and Objectives

The first step of the startup funding process is to lay out funding goals and objectives. Typically, funding goals and objectives are recorded within a business plan and later in the investor pitch deck. These tools act as the roadmap for scaling fast, staying on track, and accomplishing startup funding goals and objectives.

Moreover, without these required documents in place, investors will have some problems seeing exactly where these funds will be consigned. Show investors how their funds will help in the success of your organization. How are you planning to use investors’ funds? Where will these funds be applied? The most successful startups go into detail when it comes to resource allocation.

2. Create Your Budget

Building an exact budget is one of the difficult things to do, especially for early-stage startups with limited historical data to project with. Figure out what to do with investors’ money even before you have it. Moreover, what does your startup need to do in order to enhance the investment runway and reduce burn rate. To create an exact budget sheet and exhibit toi investors that their money will be put to use appropriately, consider the following startup expenses:

Equipment:

According to the nature of your business, equipment costs can be one of the largest monthly expenses. Ensure to budget for computers, servers, and other miscellaneous technological equipment.

Human Resources:

 In few cases, startups spend up to 25 percent of total funds on human resources expenses including employee recruitment, training, payroll, benefits, and more.

Marketing:

Prepare a Budget for website development, social media, advertising, and more. Marketing is an important component of long-term business success.

3. Research Investors

Now that you’ve prepared your fundraising goals and objectives and built a startup budget sheet, it’s time to search for a qualified startup investor. Begin your search for an experienced startup investor by following these helpful tips:

Ask for Referrals: 

The best way to get an investor’s attention is through a warm introduction. Every investor has their own condition for investing. However, many investors will open their wallets for founders who come from referral to them. To acquire a great referral, start by connecting with industry leaders, peers, mentors, and those who have already gone through the turbulent fundraising landscape.

Take Advantage of Online Communities

 Look for some of these popular online research tools including Gust, Crunchbase, and SeedInvest. These online communities are great for getting investor information.

4. Perfect Your Pitch

When you’ve found the right startup investor, it’s time to perfect your pitch. Collect all your documents, business plan and investor pitch deck, and show investors how your business is a good investment. Look for opportunities to portray a compelling brand story. Why is your business worth investing in right now and what’s at stake if the investor doesn’t choose you?