Raising capital is an essential process for keeping your startup afloat, and a challenging one at that. While there are various options for securing capital in the marketplace today, you’ll want to develop a course of action and keep yourself from wasting time. Follow these tips to understand the basics of raising capital and get yourself on track to achieving your startup goals:
Start Off Strong
- The point of raising capital is to prevent the constant draining of your own resources into your business. However, when you’re just starting out it’s important to pool your resources and start self-funding. Whether it be through savings or taking out a loan, funding your own business at first gives you full control over the initial stages. Not only does it show you have confidence in your company’s future, but an organized pre-investment report also gives investors an idea of your business potential.
Prepare and Plan Your Journey
- More than self-funding, the detailed preparation behind raising capital is critical to your startup’s success. Investors will expect you to have a specific business and marketing plan in addition to plans for their return on investment. Be sure to know all about your industry, including your competitors and the market today. By developing a precise business plan, you will be able to stay on track and share sustainable goals with investors.
Network and Learn from the Best
- Networking is a crucial way to connect with those who may contribute to your startup’s success. Start with friends, family, and those who know you are more likely to invest their resources in you. Finding any kind of support along the way will help you when reaching out to investors. Be passionate and take any opportunity to learn from others, whether they are in your industry or not.
Consider the Options
- Crowdfunding is low-risk and allows you to gain feedback as well as uphold control when crowdfunding with rewards. Try using a platform like Kickstarter, Patreon, or GoFundMe to invite others to help you build your brand. Other investors you may want to turn to are venture capitalists, angel investors, business incubators or other investment groups. Consider the different demands from each type of investor such as return on investment, line of business, and control over your startup. It’s helpful to research the different types of investors and pick out those who have the expertise you may be lacking.
Create Your Pitch Deck
- Once the planning and business development is underway, all that remains is perfecting your pitch. When creating a presentation for investors, keep it short, to the point and passionate. Within about 10 slides, include information on your business, competitors, target market, funding and future plans. Get specific on each slide and cover information such as KPIs and Quarter Earnings. It’s important to keep the investors in mind and be prepared to answer any questions about your industry.
- Raising capital does not come easy. It may be a long process, but don’t be afraid of rejection, learn from it and track your progress along the way. With definitive goals and faith in your idea, a well-thought-out plan will get you far. Make your business an attractive investment opportunity by differentiating it from the competition. Look to uncover its value. Does your product/service own its market space? How is your business unique? Decide what works best for you, commit, and keep trying.
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