When it comes to fundraising, every startup founder has a basic understanding of these realities: the process is not a walk in the park, their impressive idea doesn’t guarantee immediate funding, and repeated rejection by investors is not an uncommon story.
For early stage startups, gaining access to funds is twice as hard. Not only are VCs looking at current trends suitability and several factors, they are also typically considering some 100 other companies at any given period.
So how do early stage startups get the attention of investors?
The first bump on the road: fundraising pitch
Crucial to any investor meetup is the fundraising pitch. Remember, these investors can only allocate so much time, so they naturally expect your deck to pack a punch.
Due diligence is the key to your fundraising experience. In preparing for your pitch, you should do your homework on the ins and outs of your product and team. Also, know your numbers like the back of your hand and be sure to give accurate reports pertaining to your cash flow, financial plans, assumptions, and sales projections.
At the end of the day, potential investors would like to know where their money is going, how it will be utilised, and who will take responsibility for its growth.
Beyond the pitch: other key factors investors weigh in on
It goes without saying that investors will first consider what business problem you’re solving and who your target market is. These two factors encapsulate the existence of every startup.
Next, investors would want to know more about your team. Who is making important decisions alongside you? Who is handling the books? Who is steering the ship? How is your team moving in terms of your initial vision as the founder? These questions may vary with each investor, but the underlying fact is the same: team dynamics is highly considered in every funding evaluation.
Furthermore, investors would scrutinise the financial aspect of your early stage startup. While their methods may vary, it’s apparent that how they value your startup has a major impact on your funding round.
In a nutshell, know your numbers, learn how to determine your valuation, and study how you can strengthen and communicate your value proposition.
Selecting the best fit for your team: not all investors are created equal
On the one hand, investors can catalyse a startup’s growth by providing much-needed funds and sharing their network and experience. On the other, they can destroy a founder’s dream. Getting access to cash isn’t the entire picture in one’s fundraising process. Founders must consider potential consequences that may arise as a result of their investor choice. For instance, expectations between founders and investors could be mismatched, or their core values differ from each other.
Startup founders should do their homework before getting an investor on-board their journey. As others have put it, signing an agreement with an investor is akin to getting married.
Be equipped with the right knowledge by hearing from the experts
Learning about the entire fundraising process is important to every startup founder, especially when the startup is in its early stages.
On 23 July, in the second edition of Xero Community, a panel of experts will shine light on the lifeblood of all businesses – funds, and decipher the ins and outs of fundraising to help SMEs and startups build a successful and sustainable business amidst economic uncertainties.
Check out the panel highlights:
- Fundraising dos and don’ts
- Is money the answer to scale your business? What else should you look for in a potential investor?
- Post fund-raise – What’s next?
- Beyond fundraising – Building a culture that withstands the test of time
Learn from these distinguished panellists:
- Graham Brown – Founder, Pitch Media Asia
- Sam Gibb – Partner, Endeavour Ventures
- Junxian Lee – CEO & Co-Founder, Moovaz
- Kevin Fitzgerald – Managing Director Asia, Xero
The Xero Community – Startup Fundraising Edition is happening on 23 July from 9:30 am to 12 pm. Don’t miss this exclusive opportunity to network with fellow entrepreneurs and gain insights into fundraising strategies. RSVP today! https://www.eventbrite.sg/e/xero-community-startup-fundraising-edition-tickets-63464621391
image credit: 123rf.com / ID 22105594