It doesn’t matter if you're a startup in the early stages of development, or a seasoned entrepreneur in the market for a round of Series A funding, asking for money can be a daunting task.
Before you even start to speak to investors, you need to be sure that you can validate your business model, proving that your company is indeed a worthwhile investment.
This doesn’t only mean that you’ve done your market research and kept a close watch on your finances, it also means that you’ve been proactive in your community and are actively building a name for yourself.
Whether you are looking to secure your first, second, even third round of funding, there are various ways that you can challenge yourself and expand your network that will help you increase your chances of getting that check signed.
1. Get yourself out there
Acquiring funding isn’t solely dependent on the will of investors, although it sure feels like that when you are on the other side of a panel of judges carefully eyeing your proposal.
In the early days of a company’s history, nobody knows who you are, so it’s important that you get yourself out there.
Start by exploring your local community. Find out what events are taking place nearby, such as meetups, community events, and networking evenings.
If you haven’t found something that suits your needs, consider hosting your own event. Invite friends and family, your former boss, and even other startups and entrepreneurs who are in your same shoes.
Getting together offline is an effective way to galvanize community, while simultaneously making a name for yourself in your industry. Once you get going, you start planning future events which can serve as a platform to attract potential sponsors, collaborators and even investors.
2. Consult an expert
Companies that are growing have a lot to think about when it comes to financial growth. Not only do they need prove to potential investors that they are worth their time, but they have to make sure they have a concrete plan of where that money will go in the future. At this stage, it’s wise to reach out to someone who has been there before you and can help guide you in the right direction. Finance experts know what investors are looking for, and can help you customize your pitch based on their expectations. This could mean doing some additional market research, managing current expenses and solidifying financial projections.
The process of finding the right consultant might seem overwhelming in the beginning, especially if you have never worked with one before. In a similar way that events can help you expand your community, businesses can now diversify their networks by seeking out freelance financial consultants that specialize in fundraising, from all over the world.
3. Ask for feedback
To even be considered as a candidate for investment, you will need to show that people are actually interested in your product. Backers understand that their assistance is essential in developing your business, but they also need to know there is real potential for your company. Customer validation is an infallible way to illustrate that you have identified your market and have room to grow.
Consumer feedback provides valuable information concerning where your product is lacking and what you can do to make improvements based on their specific needs. Today there’s an abundance of affordable tools and software that allow you to test your product in real time. Depending on what your company is offering, you can provide users with a prototype of your product, like an app mock-up, which helps you work out malfunctions and improve services based on feedback. Surveys, special offers, and newsletters help you keep in contact with your customer, showing them you are a company that cares about their opinion.
Overall, becoming active in the community, and expanding both your professional and personal networks is an excellent way to start building a name for yourself, and will greatly increase your chances at successfully received funding.
Melanie Hudson is financial valuation analyst. She has has directly executed and advised on over $45 million in transactions across real estate, private equity, public equity, and venture capital. You may connect with her on Twitter.
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