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Mastering how to do fundraising without making mistakes comes with a great experience. But knowing the basics of how to raise funds the right way can certainly get you off on a much-needed good start. So we’re sharing 5 critical steps with you today on the art of raising funds. By following up on these, we hope your next or first round is successful!
A big part of facing how to do fundraising has to do with extensive research about your own startup. Investors need to be able to rely on you to be the master of your business.
So, you need to have your needs clear. Know your numbers and figures. How much money will you need? And be realistic. Only solid research can ensure you’re as close as possible to keep your calculations real.
There’s always room for some error as you’ll be basing yourself off speculations. Yet, knowing how to speculate correctly is also a craft you need to dominate.
Whatever amount you come up with as a result of the above, use it to ask yourself: You’ll need that to do what, exactly? You’ll be thankful you focused on this as you create a pitch deck. Your financial slides will certainly need this.
Related read: Startup Fundraising Explained
A key to knowing how to do fundraising with positive results is to study your potential audience in depth. You can call it part of your research prior to pitching your business if you’d like. The difference between step 1 and this one is that you actually need to focus very keenly on your prospects.
Reaching just any VC or investor will not do the trick for fundraising. On the contrary, be on the lookout to those potential business partners who are willing, capable and would care enough to dig deeper into your company.
It is best to have a pool of people you know have the financial capacity, industry interest in your field and are ready to invest than fish out via Google to hundreds of apparent money-filled entrepreneurs who might not care about what you have to sell.
Once you’ve defined your targeted investors, burn the candle on both ends to get to know them. When the time comes to meet them, you’ll be better prepared to truly engage with them at levels of their core interest.
Practice makes perfect. When you have a business plan and investor pitch deck ready, it’s time to practice.
Use your co-founders, your working team, friends and family to present your business pitch. Presenting in front of anyone, especially loved and known ones, can be daunting. More reasons to get to it!
Let everyone give you extensive feedback. You can even ask them to write down a set of questions on what you have most doubts about your pitch deck presentation. Then hear them out.
The key here is to listen to what everyone has to say so you have a full list of areas on which to work. You can decide on your own if you want to make adjustments or not. But what you’re mostly going after with this critical step to fundraising is to understand what is clear about your deck and what is not coming through to people at all.
Whatever questions investors have are as valid as a consumer’s. Truly listen. There’re tons to learn about your business in practicing your deck. And the only result possible out of this constant rehearsal is your path to perfection. Really go at it!
Any opportunity you have to truly pitch a potential funding source is also a great way to gain the fundraising experience. So, at the very least, see any fundraising efforts as a valid shot at gaining more knowledge.
We’d be lying if we anticipated you would come out of every round of funding with the exact terms and amounts you requested. Raising a successful round includes being able to compromise.
Be ready to be asked for a share of your company, a seat in your board or other forms of control over your business.
If giving up a piece of the cake is not your cup of tea, then hitting a bank for a loan might be better aligned with your needs. Crowdfunding is also a way of raising funds without altering much of your internal business structure or your way of running your company.
Otherwise, anticipate the demands and needs for shared equity and changes to your business models or other areas of your startup that will come along any large sums of investment.
Now comes the time to ask. All the prepping in the world as to how to do fundraising will be no good if it stays locked with you in your office. You need to get out there, which we know requires considerable exposure. Knock on doors, send emails, look for meetings, go up on different stages and pitch your business presentation.
Everything you’ve done to prep for fundraising is solely aimed at giving you better chances of delivering an amazing pitch deck. So put it out there and start selling.
Create long and short term relations with potential business partners. Stress how long you’ll need to produce profitable results on the raised funds, for instance. Your projections should really help you out here.
Even those VCs who’ve said no to you before, keep them on a gracious side. You never know when circumstances can change in your favor.
Stay on the lookout and actively ask to be funded. There’s nothing to be ashamed of for trying to run the best revenue-making business out of your startup.
At some point, doing your best is all you can do. However, to increase your chances at being funded, Slidebean’s pitch deck design services might come handy. We also specialize in producing presentation templates you can use for free. Bear in mind compelling visuals are a huge part of drawing an audience to your pitch deck content.
However you pull this off, we really wish you the best in your next funding round!