Our experience, observations and a must-have check-list
When raising money for a business, one should have a clear objective – the “point B”, which, when achieved, should multiply the invested capital, not waste it. Let’s dive into some of the most common easy-to-spot mistakes:
If you find your current situation similar to the bullet-points above – stop your fundraising campaign before it’s too late and change your approach.
Now, let’s see how it should be done.
There are two ways: trying to get lucky and doing it properly. And we’re here to elaborate on the latter. Raising money is an intricate process with many small details and hidden layers. To start, there is an extensive list of documentation that has to be intact for your project to be considered “Investment-ready”. The exact list varies from case to case, but in general, you should stick to these items:
Probably the hardest part in raising funds is timing the process. If you look for money at the wrong time – nobody is going to give it to you. Common mistakes in this part are all caused by making wrong assessments. If you’re raising money just because your business isn’t making any, you’re doing it wrong. Make sure to conduct an audit instead – find a competent, experienced third party that will review your practices, methods and business process. On plenty of occasions, even something as obvious as a thorough optimization of AdWords can have a significant impact on your revenue.
Make sure you don’t raise money just to live through to the next round. Many startups – and I mean MOST of them – do the following; raise a seed round, make an MVP, and then do nothing but look for the next investor with a bloated “Round A” valuation. You can guess how most of them end up – making another startup after the previous one fails. Needless to say, this is a wrong and unethical approach, which is definitely fated. What you should do instead is work on your traction and show actual business progress – in revenue, customers, strategic symbiotic partnerships and intellectual property enrichment.
Unless you’re sending rockets to Mars, the only objective you should have is to make profit. This could be expressed in cash, increased business valuation whatever else. Point is – you take money to make more.
The way to do it is by using the money to get your company from point A to point B – following your pre-made strategy and being flexible when there is a need for deviation from the original plans.
Do your homework on several things.
Last but (definitely!) not least – do not search for investment on your own, ask professionals to do that – this is too important a process to make silly mistakes, and you will never lose from getting assistance from people who’ve successfully done this before.
We are always here to assist. Having raised money and converted it into working businesses numerous times ourselves, we’ve grown to know all the ins and outs of the process and made every mistake we will help you to avoid.
In our work, we value strong teams and professional conduct, as well as the ability to progress, adapt and excel in the fast-changing world. But above all, we put emphasis on integrity and individual approach in building prospective relationships with our partners. Because at the end of the day, we’re here to do business, not just marketing.