Starting up is truly the first step in the journey of any business. And raising funds, probably the next big milestone. Raising capital makes many entrepreneurs nervous because asking for money always feels uncomfortable. Women in particular feel the need to grow into something substantial before they seek further funding, however of late in our startup ecosystem things are changing for the better. Women – like their male counterparts – are realising the need to get milestone funding at different stages. Here are five tips on raising your first round.
1. Clarity and Credibility: If you’re not positive enough towards your decision to raise money then the investors will not be able to find credibility in your presentation. They look for two important things – clarity and credibility. They will observe the immunity in your organisations. They will want to see you have commitment. Everyone loves to read the word ‘entrepreneur’ before their name but keeping that status in place is challenging.
2. Get Into The Network: Entrepreneurial eco-system is a fascinating space – while it’s open to all and encouraging to new entrants, it also thrives on networking. The successful entrepreneurs have achieved strong networks in their career. To have a greater amount of resources and insight into funding opportunities, one should work on relationship building. This will help you support your business growth, provide financial advice and get mentorship opportunities.
3. Identify Investors Who Look At Your Sector: Identifying your investor audience can prove to be a real step ahead if you can do some homework about those funds that observe and invest in your sector. Crore money seeking noses are out there to invest on the creative ideas. If you aim them as your investors then choose wisely. There are Angels, Super angels and Venture Capitalists (VCs) who have different kinds of demands.
3. Get involved with employees: If you’re a good mother then why not being a good leader? Making your employees happy should be your motto. If you keep a healthy environment inside the office then only the investors will feel free to invest on someone who is trustworthy. Employees’ extra valuable comments will keep you going in a major run. Make a concerted effort to connect with powerful businesswomen is not enough, if you’re in a position to mentor somebody else, step up and do it. At this point, you probably also know enough about your chosen investors and their interests, so be prepared with a team who can use your minutes wisely on the meeting table. Investors observe everything possible during and after the presentation. To make it a successful event, consider your team as your family.
4. What kind of investors exist?
Angels are relatively small investors. They do invest their personal money but that can be counted as a startup formula. It is true that Angels’ money is a good investment when you’re a bud in the business front but they also do invest too much of their mind into your business. They can be advisers, collaborative and a good guide but can’t be keepable always with you.
Super angels are same as angels but with a big amount of money. They too invest a heavy amount and expect you to provide full data with a descriptive money raising chart. This can be a real headache for you because super angels involve themselves too much into the business that is nearly unbearable.
Venture Capitalists have the huge pockets and come from firms that may invest in dozens of companies in markets all over the world. They not only invest their money, also invest the brand name they carry. This will help you attract great talent and add some external hype to your company. Plus, if your company is doing well, a VC will invest for your next round of funding too.
Unlike Angels and Super angels, most VCs aren’t interested in involving their head into your business operations. But there are always exceptions, and those exceptions are huge. Keeping up those terms can be bitter but ultimately very good for your company’s future.
5. Talk to founders who have done it before
It can be very useful for first timers – it gives you a sense of raising the right amounts, the correct investors and the appropriate way to approach. It also will help you firm up on the kind of equity dilution you are looking at.