Raising money for your startup is a difficult, time-consuming process. It takes time and resources to build a good pitch deck and connect with the right investors. However, there are ways to make this process easier - and more likely to succeed. In this guide, we'll cover everything from building a business plan to setting up an online presence that makes you look professional and credible.
Explore your funding options
You'll need to ask yourself what you want the money for. This will determine how much you should ask for, and how much equity you should give up in return.
For example, if you're looking to get your startup's technology ready for launch, then it might make sense to raise seed funding (a small amount of money).
If you're looking for something more ambitious - like scaling an existing product or launching new products - then angel investors may be more interested in investing because they can see a larger potential upside than other types of investors who have less skin in the game.
You can find different kinds of funding through friends and family, crowdfunding platforms like Kickstarter and GoFundMe, crowdinvesting platforms like AngelList or CircleUp (which focus on consumer companies), venture capital firms focused on startups (VCs), incubators such as Y Combinator and TechStars Labs (which provide resources while taking a small equity stake), accelerators like 500 Startups Accelerator Program(s) (similar to incubators but without taking an ownership stake).
Build a business plan
A business plan is an essential tool that you need to raise money for your startup. It's the roadmap of your company, where you'll lay out your goals, strategies and plans for success. A good business plan will be comprehensive and well-written so that investors can easily understand what you're trying to achieve with their money. The right business plan will also include detailed financial projections so that investors know how much they'll get back in return on their investment once they've given up some cash to help launch your company.
Get your messaging right
One of the most important things to do when raising money is to make sure that your messaging is clear. You need to be able to explain what you do in a few sentences, and also show that you have a plan for getting your business off the ground and scaling once it's up and running.
Let's look at an example. If someone asked you "What does XYZ do?" how would you answer them? What are some words that come to mind? Write them down - they can be useful later on!
Do cold outreach
Cold outreach is a great way for you to get funding for your startup. It can be difficult, though, so you need to prepare yourself for a lot of rejection. Your chances of getting a response will increase with persistence and preparation.
Know what you want from the investor: Do you want them to invest in your company? Become an advisor? Refer clients? Be part of a future round of financing? Knowing the answer will help you tailor your approach accordingly.
Have a solid pitch deck ready: You should have one sheet or slide (or less) that summarizes all the key information about why they should invest in your startup, including how much capital they could contribute and what share of equity they would receive in exchange (and if there's any dilution).
Make sure it's easy for them to see how their money could make an impact: In addition to providing them with information about themselves (like how much cash flow they'll earn each month), show how that cash flow works within the context of what makes sense geographically - whether it be where there are office locations near each other (for an app developer), or if there are areas where people spend more on goods than others because those products are needed more often due to weather conditions (for example).
Talk to investors at meetups
You may be surprised to learn that the first step in fundraising is not actually raising the money.
The most important thing you can do when looking for investment is make connections with people who are willing to invest their time and money into you and your startup. The best way to do this is through meetups - meetups allow entrepreneurs in your local area to connect, share ideas, and help each other out.
Meetups are also great places for networking opportunities - you'll get an opportunity to meet a lot of other entrepreneurs who could potentially become your customers or partners if they like what they see at these events!
In addition, meetups are a good way for potential investors (like angels)
Form a network of advisors
An advisor is someone who has experience in your industry or business model. They can help you understand the market, your customers and your competition. They also know what's required to get a company off the ground, up and running, so they can navigate the fundraising process with you. Advisors are often CEOs of other businesses in your sector who want to share their knowledge with a promising new company like yours.
The first thing you should do when building out a network of advisors is identify potential members by reaching out directly through LinkedIn or using another platform that allows for introductions via third parties such as AngelList or Gust Launchpad (which we use).
Once contacts have been made, it's important to set clear expectations about how involved they will be in helping shape your vision before asking them for advice.
It's much easier if both parties decide upfront whether they're comfortable being passive advisers versus active participants who are going to actively pursue investment opportunities together; once this decision has been made then everyone knows where they stand on this issue so there aren't any surprises later down the road!
Ask for introductions
If you need help connecting with investors, ask a friend or family member who has access to the right people. They might know someone that can make an introduction for you. Alternatively, if they don't have connections but feel comfortable recommending your startup anyway, ask them to introduce you as well!
You might also want to reach out directly to an investor yourself - just keep in mind that this requires confidence and persistence.
If the investor is interested in what you have to say, they may be willing to meet up with you over coffee or lunch so they can learn more about your business (and see whether or not it's something worth investing in).
Create an online presence
Have a blog. The first step to becoming a trusted brand is to establish your expertise as an expert in your field. Blogging about topics related to your startup will help you build credibility, as well as create content that can be repurposed for social media posts and press releases.
Create a website. Your website should reflect the professionalism of your business, so make sure it's easy on the eyes and provides all the information potential investors need about who you are and what problem you're solving. If possible, include testimonials from happy customers or industry experts showing that people are already buying into what you have to offer; this will give them confidence in investing with you as well!
Build up an audience on social media platforms such as Twitter or Instagram by sharing links back to your blog posts (or other relevant articles) along with photos/videos highlighting what makes your company unique - this way when someone sees these posts they'll learn more about who we are without having beforehand visited our page directly themselves."
Raising money is hard, but these tips will help
Raising money is hard. But it's worth it.
You can do this, if you work hard and try to be as nice as possible to everyone in your life who knows someone who might invest in your company.
In the best case scenario, you will raise money from investors and become a millionaire overnight.
In the worst case scenario, you'll go back to your day job with no startup under your belt and a bunch of unpaid bills for the office space you shared with four other entrepreneurs who also didn't raise any money for their startups but did make some new friends who will probably still be there next week when they all meet up again at a happy hour after another long day at their jobs where they're not making any money or living out their dreams because raising capital isn't easy and sometimes even people who think themselves capable of changing the world can fail miserably at it (like me).
Raising money is never easy, but it can be done. By following the steps above, you'll give yourself the best chance of securing funding for your business.