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What Startups Need To Keep In Mind While Raising Funds?

The outcome was a doubling the number of unicorns in India, and several highly successful IPOs from the startup and digital business arena. This is set to inspire business founders to proactively look for fund-raising

Photo Credit : cloudfront.net, Shutterstock,

What Startups Need To Keep In Mind While Raising Funds?
What Startups Need To Keep In Mind While Raising Funds?

One of the most heartening aspects of the year gone by has been the funding boom and unprecedented growth across various industry verticals. In the digital business ecosystem, there are companies that have witnessed massive growth in a single year, leading to tremendous investor attention. The outcome was a doubling the number of unicorns in India, and several highly successful IPOs from the startup and digital business arena. This is set to inspire most of the business founders to proactively look for fund-raising.

There is no doubt that early-stage funding comes across as a sort of validation of a business idea and helps founders scale faster to achieve their goals. However, it can also be a complex process requiring care and due diligence.No matter how impactful your business is, it is rare for investors to approve funding in the first meeting. There are certain things that startup founders can keep in mind to better secure and manage funding for their businesses.

Know your strengths – Do an honest SWOT analysis. Entrepreneurs with successful businesses are consistently in sync with their strengths as well as weaknesses. They know the talent requirements of their businesses and build the right teams. Ideally, they should be leaders on the company’s payroll and not necessarily co-founders especially for firms that already have 2-3 of the latter in place. There should be a willingness to learn, course correct and seek advice. If you don’t have a coach, a mentor or consultants then it is advisable to be active in industry forums, listen to the community and learn from observing other entrepreneurs.

Have clarity of vision – Your vision can’t just be about ‘building a brand that will become a unicorn in 5 years from now.’ You need to be absolutely clear about what you are going to do, the problem it will address, and the audience that will be looking for such a solution. For instance, Uber didn’t set out with a vision of ‘building a taxi network worth a billion dollars.’ It rather focused on ensuring easy access to rides anywhere, anytime and for anyone willing to pay the fare.

Build personal connections – Building reliability is the most impactful but often overlooked aspect of fund-raising. Even before making a pitch, it is important to come across as someone who can connect on a personal level. Researching about the investors you are going to approach, their past investments, personal trajectory and other information can help build a rapport. Approaching investors that are better aligned with your vision or share the same outlook towards business can make fund raising easier and more impactful.

The art of pitching – Try to ensure that your pitch deck is as concise as possible. We don’t suggest a one-pager, but make sure it doesn’t go beyond 20 slides, especially when it is the first pitch. Your pitch should tell a story, showing the bigger picture, your vision, interspersed with slides having information about your plans, personnel, market scenarios, and the financial projections. Make the first pitch more visual with only crucial information. A more elaborate plan and pitch deck can be made once the investors are enthused by the first attempt.

Even if the investors don’t promptly respond to the early pitch, it doesn’t mean they are not interested. Sometimes, they might like an idea, but would choose to wait and watch for a while on how the company moves forward. Don’t keep following up with emails or messages like, “So, what do you think?”

Once you have pitched to an investor, keep sharing business updates with them. It could be the new strategic hire or a product launch or your monthly sales figures. The right follow-up strategy should be one that keeps reminding investors that your business is steadily moving forward.

With focus on these and other such key areas, it is more likely that you will be able to raise the kind of funds you need at a specific stage of your business. Go ahead and grow well in 2022 and beyond!

(The given article is attributed to Ankit Kedia, Founder & Lead Investor, Capital A and is created exclusively for BW Disrupt website)



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