Eyes here, promising startups!
Stop everything you are doing right now and take a good, long look through this article on why you must prep some things up before going to investors.
Trust us — it’ll position your offer better and actually set you off right on that fundraising goal.
A startup company is almost always running on the “ready, aim, fire” mentality when it comes to looking out for funding and connecting with investors.
Not particularly a bad habit, however, there is a more secure and better by a mile way to raise funds and win business people’s cold (cash) hearts.
Obviously, it starts with your select team, your ingenious idea, and, of course, a proper minimum viable product (MVP).
Hold up. That’s just the basics.
Don’t go running to your target investors just yet because these will not win the pitch.
They will be understandably defensive — because they want to protect their funds and their brand image, of course. But keep in mind too that they are in the game to bring ideas like yours into reality.
You will only need a bit more credibility, confidence, and correct content to sway them.
The Starting Point
Instead of agonizing over for the perfect proposal pitch to come to your lap, why not take your idea out on a trial run.
● Use an MVP that is tailor-made for your business model and validate that — on your own or via trusted startup consultants. This way, you are not only able to test how the actual product works live but also be able to polish your spiel for when you stand in front of big investors.
● Check the outcome and feedback against your key performance indicators to see whether your product really is on the winning track. We don’t want to fall flat on our faces when an investor points out egregious faults in our final presentation, right?
This is step one of showing your credibility.
Checklist for the Standout Fundraising-Proof Startup
There are only three things to keep in mind for your offer to be attractive to investors:
It must be scalable, unique, profitable.
And how do you know when you’ve accurately hit the marks? Simple:
● Your team understands the pains of your chosen niche. You can clearly point out the prime issues and needs of today’s market.
● Your product is a remedy to that pain.
● Marketing will not be an issue when launching your product. No one wants to add another hill to climb just to get the word out about what’s supposedly a sure hit.
● Bundling is possible. You know how consumers love getting two-for-one.
● Your product is at the right time to market.
While being “unlike anybody else” and “disrupting the market” adds some authority points to your pitch, it can also be a bit of a headache for you if you are penetrating a new market without competitors.
Think of direct customer acquisition and how it’s easier when there is already data available.
When you already know that your startup is scalable, unique, and profitable, it’s time to define, design and deploy next.
Validating the Market
Go online and you’ll find a deluge of guides on strapping your startup to success. However, here, we’ll tackle what you might be always missing when testing your market.
● Build a strategy.
Think about the issues you believe are concerns for customers. How will you provide a solution for them? What features will your product have that will directly help the users? Basically, map out the whole road from market pain to market remedy.
● Try out a blended market approach.
Those who are afraid of innovation do not last long in today’s cutthroat competition. What’s stopping you from trying out live events to promote your product? Or even the viral social media platforms?
Get closer to the actual paying market by being in their vicinity.
● Look for inputs.
Always. You might be looking too closely to the marketing strategy that you’re missing a lot of good insights from people who actually want your offer
● Handle every objection from the audience.
It might not be the most fun thing to do, but questions and objections are good places to start building your brand better.
And wouldn’t it be so validating to come back to them with more astonishing results?
Your market is readily available to you. Don’t hesitate to use it to your advantage.
When to Ride the Market
Finding the right time to join the market is always a concern for many startups. It’s a gamble, of course, and one that has two sure outcomes — fast and easy win or a total bust.
But there are other options available that can allay your fears of loss and still get your toes wet in the market. Such as:
● Joining an incubator. Business incubators will essentially warm your launch by providing services such as office space, marketing support, and even access to some financing. They are good steps to take forward without putting too many, too much on the line.
● Learning to be in stealth mode. Because no one knows you yet, there is a chance for you to directly connect with prospective customers one after the other. Make your pitch and see what sticks and what fails for them. Apply changes and pitch again — until you get the desired outcome. With these, you are not blindly hoping for the best. You know that the moment will ultimately come — but later when you have the data and numbers backing your product up.
But what good is a fiery start when you do not know how to finish?
You see, investors will ask about this for sure because they do not only care about how to get your startup running but also growing in many places.
Even before hitting that pivotal pitch, make sure to have an answer to this burning question:
● What’s your exit strategy?
What will happen when you go public and then acquire someone? How about when your product is acquired by another entity? Or are you ready to make it into a cash cow?
Reaching out to investors is considerably one of the biggest steps you will take when launching a startup. Make that golden opportunity count by being well prepped from the opening spiel to closing the deal.
Invest on You Before Asking an Investor
After reading all of that, we hope you gained clarity on the essential steps to consider when fundraising for your startup project.
While they may require more work than you would have expected, you have to consider that they are in place as your roadmap to success.
Do you have a story to share about startup fundraising and handling investors? We would love to hear them from you!
And if you are looking for assistance about the whole startup business, hit us up with a message here, and let’s see how we can be of help to you.
This article is created by two people: Tatiana (visual storytelling and investor pitch decks) and Maury (startup business consulting, founder of Level Ventures). We have an amazing offer for the startups in a seed+ stage, don’t miss it!
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