Key Pointers for Startups Raising Funding
Nobody ever said that launching a startup and growing a business would be easy, and it’s not. In fact, it can be incredibly difficult. Let’s start off with a few key pointers for startups looking to raise funding.
Being all-in on your startup is step one. Part-timers need not apply.
You need a complete team to start a business. You need somebody filling each role in order to successful. For example, your startup isn’t going to go very far if everybody on the team is working on building the product, but no one is working on selling the product.
Sweat equity is table stakes, not valuation metrics.
It is important to note that funding is an enabler that accelerates what you already have going. Funding is not a solution to solve all of your problems.
Find your growth story. Entrepreneurs think investors want big revenue, but what they really want is predictable and repeatable revenue. In an early-stage company, the revenue is scarcely large. However, if the company’s income funnels are predictable based on recurring revenue, repeat revenue, or known lead generation funnels, you have a growth story to tell the investor.
Build and test your income funnel so you know it works. It is better to tell your growth story to date, versus telling the ‘we’ll be big someday’ story.
Sell it first, build it second. Most startups overinvest in their tech before they search for someone to buy it. A better strategy is to sell it first, and build out what the customer wants second.
The prospective customer should be involved at every step, not just the last step of buying the product. They should be talking to the startup about the problem they need solved. In essence, the customer should be guiding product development. In every investor discussion, you should talk about the customers you are engaging and their interactions with your idea or product – even in the beta phase.