Fundraising Basics

1 min read Fundraising can be an exciting venture, yet it can also be a bit nerve-wracking if you don’t feel secure in your campaign decisions. Learning the basics will help you to raise funds confidently and successfully. In this article, we discuss the basics of fundraising including how to know when it is the right time to start your raise and the basic principles of fundraising. Continue reading below to learn more.

When to Start Your Raise

In launching your startup, look for a trigger that indicates when to start a fundraise campaign.

Common triggers include:

  • closing a lighthouse customer account or achieving a revenue target
  • signing up a new team member or advisor
  • finishing a beta version of your software or an MVP version of your product
  • closing funding from a lead investor

In short, investors look at sales, team, product, and fundraise as the four core areas for progress. When you achieve a milestone in one or more of these areas, then it’s a trigger to consider launching a fundraise campaign. In approaching an investor, you should have a milestone completed AND a milestone to accomplish with the funds to be raised. 

Principles in Fundraising

There are basic principles around fundraising that apply in every situation. The first and most important principle is to build a relationship with the investor. The more you know the investor and the more they know you, the better the outcome.

Next is that you’ll need to demonstrate results in every contact. Never show up without a currently relevant result or a proof point. With this said, it is still important that you be honest at all times.  It only takes one deception to ruin the relationship.

The next principle to consider is that it’s the number of touches and consistency that counts, not how long the discussion or pitch deck runs. It takes four touches for an investor to understand what you are doing and seven touches before they make a final decision.

 

Lastly, include the “Why?”: Why are you doing this startup?

 

Read more on the TEN Capital Network eGuide: Running a Fundraise Campaign


Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

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