The concept of raising money seems simple because we hear about companies who go from an idea to full funding within several months. But the reality is there are much more who try and try, maybe even for years and get nowhere and no one ever talks about them. So is there a secret recipe that guarantees you funding? Nope! But here are some tips that will increase your chance to get funded astronomically:
- If you can’t help yourself, why should others help you: Who wouldn’t want to get money pouring into their company before getting started on a prototype of their idea? That’s the ideal scenario right? But in reality, investors would like to see efforts by the company to show that they are in fact serious about what they’d like to do. Why would people blindly put their money into a business that isn’t going to go out of its way to build their product?
- Start lean: Who doesn’t want to create a product that will do everything they have ever dreamed off on their first launch? In reality, this is very hard for a startup to accomplish unless they are fully funded from the beginning, and even then it’s a feat to pull off. You don’t want to get into a situation where you have too many goals to meet and promises to fulfill and can’t deliver. Or you rush to meet them, and the quality is mediocre. The way to do it right for most startups is to begin lean so that your focus is on one or maybe two main features in your product that you’d like to excel in. Investors want milestones and constant updates, and if you can’t meet them, they will pull the rug from under you in the middle of your project.
- Get the word out to the world: This is the toughest part. How do you get people around you, around the world, to know what you’re doing when you don’t… actually know that many people. Get on Facebook, Twitter, email, blogs, TV, attend events, conferences, etc… You need time and need to try everything. This will become a full-time job, but the sacrifice is required if you want serious funding. Investors will look at your social efforts, and that may give an indication of how successful your product may be.
- Create a pitch: You have to be able to convince the investors to invest! Do your due diligence, make sure you understand the market and the consumers as there will be a lot of questions from the investors. Investors want to invest in a company that will scale, so you have to show how they will grow their money that gets a return on their investments.
- Be patient: Getting funded takes time and patience. Try not to give up immediately. Investors want to make sure they are investing in a place that gives them the most chance to succeed with their money. They too will do their research, and that may take a while depending on how much you’re asking for investments.
If you’ve been at it for a while and you have no interest from any party, then it may be a good idea to reevaluate and start again with a fresh idea.
What do you think about these tips? Have you been through a similar experience and would like to share?
Let us know in the comments section or Tweet us @essjay_ent!
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