Fundraising 101: How to get Started with your Startup
Fundraising is absolutely crucial for any just-budding startup. Many startups will not flourish unless they begin bringing in money to cover costs of production, marketing, etc.
Asking for these funds can be especially difficult for any “green” entrepreneur, just starting to make his mark on the startup community. Asking absolute strangers (maybe friends or family members) for capital to get your business growing would be uncomfortable for anyone. Asking for these funds usually require some sort of promise of repayment but, that is not always possible for new or small businesses. In order to be sure your investment pitch is ready to go you must do a few things to prepare. Preparation will put you at an advantage and will comfort you in this time of uncertainty.
Here are some successful ways to get yourself started!
Preparing your Pitch Deck
Whatever you do, do not bring in your 50-page, sleep-inducing business plan but instead, create some concise, liberating pitch deck. Be sure to include the research, team biographies, and financial projects into your appendix. This does not need to be longer than 15 slides. Ask yourself, what is critical to know about my company? What do I think any investor should know before giving me money? What would excite them about my business? Including things such as: the problem your solving, your plan to solve this problem, key milestones that have already been accomplished, industry experience, and why this is such an incredible opportunity to be a part of. Speaking on milestones will help investors understand how much money you need and why you need it. Always be strategizing the next phase of your product or company, so that you can answer those questions when they arise.
Do Your Homework
Investors can see through any smokescreen you put in front of them. This is because, there are plenty of “fish in the sea”. They receive a lot of requests a year and have had their fair share of bad investment pitches. It is in your best interest to actually do your homework first so that you are not wasting your own time but theirs, as well. Targeting specific investors in your industry would also benefit any hopeful entrepreneur. Coming with a software pitch to an investor who knows little to nothing about tech would not be a good idea. No one wants to seem like they don’t know something about everything. Look at what type of investments they have made in the past and see if your company or product aligns with their past investments. All of these things will help you trickle down to a few investors that will really be beneficial for your company.
Duh. This is presentation 101! You will see that once you have practiced your presentation several times you can polish it each and every time. Practicing your pitch will help you prepare for the real thing and will give you an advantage to anticipate questions from potential investors. If you continue to get the same questions over and over again, you may want to rework your pitch to cover those topics. Practice does actually make perfect in this case. Practicing will build your confidence which will show in your pitch. Confidence matters. Who wants to invest in something that no one is excited about or confident in?
Written By: Austin Rains
Dayton Tech Guide Marketing Intern