Startup Funding

5 Ways to Improve Your Chances to Secure Startup Funding

Raising capital for your startup, whether it’s the first or fifth time, is not an easy task. And while there are a number or reasons that contribute to most startups failing, understanding and becoming more proficient in various nuances of fundraising will continue to be one area of most importance for the majority of entrepreneurs.

Recently, some of the most influential founders and investors across the startup landscape gathered for a panel discussion to expose some of the myths of fundraising strategies and share some of the lessons learned from their own experiences, both good and bad.

Here are some of the best practices culled from their discussion that evening:

(1) Demonstrate your market

Utilizing user interviews and prototyping as well as continuous product market testing can be vital in providing proof of demand and the precision of your positioning.  Information gathered at this stage can be used as an affirmation for a product-market fit when you begin to approach and pitch prospective investors.

Funding limitations can impede a lot of startups from getting up and running, although it is estimated that nearly forty percent that do launch, fail because they developed something that has no real market.

 (2) Target the fit

The preoccupation to secure funding causes some startups to overlook a more strategic approach in developing a pipeline of investors they can pitch.  Most implement a strategy of approaching as many potential investors as they can. Of course volume is important, but it is also vital to pitch investors that have an interest in your market. It’s always wise to identify angel investors and VCs who focus on your stage of funding as well as your target market and company vision.

Though, in the beginning you are likely to accept money from any source, your eventual goal should be to target investors who can add capital as well as value to your business.

(3) Know your potential investor and their motivation

One founder who invests in early stage startups preaches the importance of understanding the economics of investing and being mindful of what an investor thinks from their personal stresses to what they need to accomplish. It’s also very important to line up your story with their interests and beliefs making it easier to connect on strategy.

 

(4) Perseverance

When, on the very first day one company launched in 2012, it was also the day Hurricane Sandy struck resulting in a complete inability to fulfill orders and conduct business. The company’s founder says you can count on having potentially destructive calamities both before and after you open for business.  Another says you’ll have hundreds of pitches at first and all of them will fail but in most successful ventures, that persistence will eventually pay off.

(5) Allow your passion fuel the narrative

One other important ingredient in all this is to have an unwavering belief in what you’re doing will work, even when you come across those who will try and dissuade you.  If you believe strongly in something, you should see it through.

For many, companies that stand out have founders who live and breathe what they do with little separation between the individual and the business. Showing that kind of passion and commitment can help you persevere through the many obstacles you’re likely to experience.  Passion and perseverance alone won’t guarantee anything, but when fueled with a strategic approach and thought process, it will make it easier and increase your chances for success.

 

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Posted in Startups.

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