After the enormous influx of venture capital investments that our startups saw in the initially half of the year, serial entrepreneur Bhavna Suresh jumped a new higher with her startup 10Club. The entrepreneur closed the biggest seed round funding in South Asia lately for a whopping $40M, therefore etching a new record in the history of unicorns for the nation.
As an early stage entrepreneur searching to take the next step, if there is something that you can discover from these marquee massive ticket offers is that investors are betting massive and betting bold in emerging startups. They are not afraid to take dangers and test new waters. Investors are now open to newer tips and are prepared to give an chance to entrepreneurs that have the capability of getting catalysts of alter.
However, there is a drawback. In this initial stage of fundraising, most startups are so involved in reaching coveted enterprise numbers that they generally overlook or are not familiar with what investors are basically searching out for, therefore losing out on beneficial possibilities.
Hence to enable entrepreneurs stroll this hard road, following speaking to more than 600 founders last year, I identified ideal practices that can enable entrepreneurs get that initial funding for their enterprise.
These ideal practices are divided into 3 stages based on the level that you are at present at:
Before the Pitch
1) Know regardless of whether you are prepared to raise or not
First and foremost, founders ought to ascertain if the startup has reached the proper stage to raise funds or not. This depends on the present predicament and nature of your enterprise (regardless of whether you have MVP and early traction), enterprise ambitions for the next 12-18 months, and the funds essential to attain them.
2) Determine your outreach tactic
Next, prepare a list of investors interested in the stage of your startup. Since barely 10% of them would show interest, it is crucial to have enough alternatives. Cold emails have a queue of their personal, so it is essential to see if you have connections that can lead to warm introductions with investors.
In addition, strategy to devote sufficient time and power to the fundraising method – at least two to 3 weeks. For this, element in the time it would take for meeting preparations, stick to-on sessions with at least half of them, and extra buffer time to respond to investor queries.
3) Have the components prepared
Lastly, make an successful pitch deck inside 10-11 slides, defining a concise issue statement, difficult capabilities of the group, item features and vision, breakdown of the capital specifications, and your go-to industry tactic. Bonus tip – hold a list of FAQs prepared for stick to-up inquiries.
Once objective details has been conveyed, you can superior use your time through the meeting to go by means of more qualitative information.
During the Meeting
4) Focus on your soft capabilities
Early-stage startups are nonetheless lifting off the ground. While the item or industry tactic may perhaps be clearly defined, it could alter down the line. Therefore, at this point, investors give more value to the founding team’s capabilities. Keep the numbers and enterprise strategy at hand, but reserve the meeting for communicating soft capabilities.
Discuss the chemistry amongst the group, strengths of every member, why you are the ideal decision to resolve the issue, your vision, and most importantly, why you would bet your life on this.
Overall, commit this time sharing any worth add with the investors that may perhaps not otherwise be apparent from the pitch deck.
After the Meeting
5) Be prepared to close the round quickly
After the meeting, the investor will work on the due diligence method. Here, startups can additional help in the choice generating method.
You can do your aspect to make sure that the round closes rapidly to avert any lag that can lead to disinterest by the investors. Keep a information area prepared with crucial documents for interested investors, be out there for stick to-up meetings, and inform investors when you would like to close the round.
Moreover, founders ought to gauge investor interest to determine when to quit exploring other investment alternatives to avert excessive dilution. At the similar time, it is excellent practice to give investors time rather than chasing them excessively.
In a nutshell
Fundraising can be a time-consuming method simply because of the mismatch in expectations amongst founders and investors. However, founders have to be constant and confident about their enterprise plans. The method can be time consuming and may perhaps also be a test of patience – on the other hand, when the initial hurdles are resolved, the method becomes more meaningful and effective, enabling founders to raise rapidly and focus on taking their startup to the next level. Hence, when preparing your funding pitch, it is advisable to assessment your existing credentials completely and stick to these ideas to make sure your seed funding is seamless.
Consequently, who knows – if all goes proper, your startup may perhaps just be the next one to make it to the unicorn club!
(By Pearl Agarwal, Founder and Managing Director, Eximius Ventures)