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Home General

The Basics of Raising fund for Startups

by Dare Afolabi
2019/03/22 - Updated on 2021/04/22
in General
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crowdfunding 3158320 1280 1

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A major challenge of Startups is in the aspect of raising fund for actualizing the ideas and innovations thought out by the owners or founders of those Startups. The better part of the effort put into Startups at the initial stage is spent in searching for funds. Unless you have a defined plan that will take you through a step by step journey in that direction, your efforts might not yield much, relative to the amount of time you put into it.

Availability of funds to run any business is seen as a vital lifeline in running the business successfully. The lack of it, may always be a stumbling block to whatever progress you intend to make, or, achieve. It is, therefore, of necessity that, you understand the basics of obtaining capital for your Startup.
These steps will guide you on how to go about raising capital for your Startup:

Get yourself prepared 

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Addressing and assessing the different parts of your business structure is part of the preparatory process you would have to go through. Getting yourself prepared, might appear to be of little significance to you, but overlooking it might just be the beginning of the challenges you would have preferred to avoid.

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Beyond your business structure, you would need to have a basic understanding of your competitor and the market, your financial projections and what probably your equity will be.

The process itself is no doubt, time-consuming, but with the knowledge of what you want, it would be easier for you to work towards attracting your targeted investors.

Knowing types of investors 

Raising fund - cfamedia
Having knowledge of the types of investors available would narrow your search population for one. You need to be able to navigate your way with them, hence, you need to sharpen your knowledge on financial matters, so that, when you are discussing with them, you will be on the same page, which is sine-qua-non, to convincing them.

You would be meeting Angel investors, Venture Capitalists, Founders and even, your friends and families.

More often than not, your type of Startup business, depending on the stage it is, would determine the kind of investor you would meet and eventually the type of fund you would secure.

Be in readiness for your pitch deck 

Raising fund -cfamedia
Having a great idea is good, with the ability to translate it to a working Startup model, with scalable structures, is crucial, but nothing happens, if you stop at that stage. The ability to effectively present your ideas and Innovations to investors in clear and concise terms is necessary.

When making your presentation, ensure that you stress the most crucial parts of the business that, are most likely to arrest the attention and strikes the imagination of your potential investors?

Your pitch deck, which preferably, should not be more than 15 slides, has to contain, more importantly, your target market, milestones, and future plans. With this information, your potential investors would determine if there is a synchronization between their interests and yours.

Networking 

Raising fund - cfamedia
In the process of networking to get more traction, you do not need to always promote your business. Have it, as a habit, to be of help to others. This will put your reputation on a bright side and people will more likely trust you and likely render assistance. The more they think of you, however, the more they become conscious of your solutions and the more they are likely to patronize you.

With all these set in motion, however, there is still no 100% guarantee that you will obtain all that you need from an investor, so, it is necessary that you keep on exploring diverse methods of raising fund. Having knowledge of raising fund would allow you to be ahead and ready.

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