The 7 Lessons We Learned About Fundraising
Updated: Mar 17, 2022
Raising money for your business can be a challenging task. But it's also an important one. That's why we've gathered the seven most important lessons we learned from our own EIS seed round. By understanding these lessons, you'll be able to raise the money you need to take your business to the next level. So let's get started!
Here are 7 things ALL founders should keep in mind:
Get out of your own head. It is all too easy to get trapped in the way you talk with your team about your business, rather than talking like an investor would. Get out of that funk and start asking yourself what they want from a company - are there certain risks you know investors will not take? Can you alleviate some pain points or solve big problems for them so their portfolio grows?
You can’t have too much network. There’s a saying that goes, “The more people you ask for help, the better your chances are at getting it. Other networks can be used as an extension of one's own." You might be surprised by how willing others will be to help.
Angels do things at their own pace. Angels don't need to invest in the way that VCs do. They can take their time, and if they're not interested then there may be no response at all - which could simply mean "not now" rather than a 'no’. So remember: Angels may say no, but it’s okay to try them again when you've hopefully improved your chances for funding.
Noise is good (mostly). Building a strong social media presence can be an excellent way to not only raise your profile but also find investors. VCs are now using metrics like traction and engagement as indicators to show how much noise startups make in the market, so it's important for you to take this into account when planning your messaging and frequency before launching fundraising efforts on platforms such Twitter, LinkedIn, etc.
Be prepared. You may think you are prepared for your investor meeting, but the reality is that 50% of startups begin their fundraising campaigns ill-prepared. Don’t waste investors’ time with a poorly written proposition. We can help. Our investability rating and assessment can show how well-founded your idea is. So, before firing up that laptop or grabbing that phone--make sure you’re ready to have the conversation you want to have.
Fundraising is a sales process. This is an oft-forgotten point. The sales and related support activities that you undertake to get your product or service to market should be reflected in your fundraising campaign. Good lead generation and validation; evaluating your points of difference and USP; showing marketing support for your sales efforts, and the creation of excellent collateral and messaging can maximise your chances of success. Your fundraising campaign should be just as methodical as your sales process — capture every opportunity, measure response rates and follow up in a timely manner.
And finally, a reminder that fundraising is draining. You, as a founder, may feel the most exposed to rejection, and yet the future of your company depends on success. Rejections come many times quicker than acceptances. Let’s face it, you are selling a business idea to strangers who will be rightfully sceptical. It’s easy to feel like your business may be grinding to a halt because of the time commitment required for fundraising. Focus on your (and your team’s) wellbeing, do your best to maintain balance in your life (we appreciate this is easier said than done) and keep your tribe of friends and believers close.
Are you fundraising soon?
Capital Pilot’s Investability Assessment and Rating should be the first port of call for founders preparing to raise funds. We provide objective feedback on your investor proposition, with clear suggestions on how to improve. In addition, we provide rated startups with lists of matching investors to help focus your campaign.
The Capital Pilot website has a wealth of resources on different aspects of fundraising which can be found HERE.