The StartUp Fund Raise Toolkit
As StartUp Entrepreneurs, there are several times when there is a need for infusion of growth capital to power future operations. Whether you are at the Early, Growth or Maturity stage there is always a need to keep the runway intact!
After all, we all aspire to raise the next Unicorns as an active part of the StartUp ecosystem, but striking a strong balance between your venture's and the investors needs is a crucial step in the journey to a successful funding round.
It is interesting to observe the discussions from both the StartUp and Investors perspective at our venture StartUp Consulting India - as a bridge between the requirements of both entities!
The investors lens is an important one for founders to understand deal procedures and benefit greatly. There needs to be a genuine method to differentiate yourself from the competition - with several other ventures in the market!
Bringing to your attention - the StartUp fund raise toolkit - a curation of things to help enable the next fund raise for your venture. Often at times, there is a need to interpret and understand the desires of investment funds - to facilitate a fruitful discussion and a potential fund raising opportunity. After several StartUp discussions, evaluations and introductions to funds here is a collective list of top tips to drive the next round of funding:
Prepare Documentation - The most crucial step in this process is to prepare a strong pitch deck, financial model, shareholding details and video samples of your product or service to enable a strong presentation to the investor, making them feel a part of the initiative to establish a strong connection. Factors such as the problem, solution, market size, financials, and team are some of the key elements that should be included.
Third Party Review - Reach out to an external party, whether it is a trusted advisor, mentor or a consultancy to provide an outside opinion on whether the true essence of your StartUp is being observed, by going through the deck and documents. This will enable another perspective of what is being seen from the outside about your firm's services.
Identify Investors for Mutual Growth - A strong sense of market understanding to differentiate yourself is an integral part of the funding recipe! You need to step into the limelight through deep research and analysis of potential investment partners. Understand the objectives of investors considering deals in your market and at your stage of growth, so you could bring out synergies during the investor reach outs.
Network Partnerships - Now that you have identified synergies between your business and potential investors into your venture, it is time to define your approach for the reach outs. You could identify Investment Banks or entities with strong networks globally or within your geography to help in the fund raising process, and explain your sector focus so that they can look for investors accordingly.
Reach Outs - Once the entities have been identified, it is time to commence approaches as per your defined plan. The reach outs should follow the layout defined in advance, the objective is not to give out your pitch deck to everyone everywhere! Send it only to those funds or investors that could potentially show interest.
Meeting Outline - Before even the initial meetings with entities, do more specific research! Find out what they normally invest into, the kind of companies in their current portfolio, industries covered and whether there could be synergies between your company and ventures in their current cohort. Based on the information collected, define some points that you could use to contribute to the discussion with the investors.
During the Interaction - Be humble, honest and empathetic towards the investors. Let them lead the meeting and answer their questions in a precise manner. The StartUp World is all about professionalism, trust, honesty, integrity and loyalty - So following these rules will take you a long way and help you gain trust during the meeting. Use the points noted during the outline step to contribute to the investment discussion.
The Big Close - Investment rounds are raised after taking several factors into account, however following these simple steps will bring you closer to getting those funds in and reaching to the next level of operations. For that Big Close, you need to follow through these steps to get that next round of investment.
Finally, it is important to note that raising investment is not a short process, it is highly dependent on multiple market factors and one quality can take you through with flying colors. That is "Patience" - it is that quality of yours that will help you glide through this round of funding and take your business forward, especially in Covid times!
All the Best for the Fund Raise part of your Entrepreneurial journey!
Let us help you start your journey, connect now at aditya@startupconsultingindia.in.