You have achieved your milestone, decided how much funds you want to raise and what stage you want to hit next. What else do you need to do? Technically, nothing else. Most first-time founders will simply jump to the chase and start going after the investors, and probably spend long frustrating months getting refusals after refusals. Whatever else you have done, try to add these six things before you start the hunt.
Discuss with other startup founders who have recently raised funds. I have explained the importance of a good network system to fundraising. But your network should consist of other startup founders too with whom you can share experiences. Find out from them what their experience was like, what they learned from it, and what they would do differently now that they know better. You can also get some advice on determining what is the right sum to raise.
Speak to a legal expert. No matter how ready you think you are, a good way to set yourself up for success would be to get guidance from a legal expert (preferably one specialized in startups within your space). You need to know what to do from a legal standpoint. It is also necessary to know if you are required to apply for patents or get some form of Intellectual property (IP) protection before you go pitching to investors. Other startup founders might make a recommendation or two for you, based on the expert they worked with.
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Research and pool sufficient data. This is something you would normally do before raising funds. Get the right metrics for presenting your company’s progress and growth potential. Know why you spend every money you spend, and why you need the injection of more funds.
Prepare your pitch. You know that you will need a compelling pitch deck that is both clear and concise. In as little time as possible, you should be able to explain who you are, what problem your company is solving, and why investors should care. If you want, you can refer to the earlier post on what a three-minute pitch should be.
Get experts to double-check your valuations. You may find your potential investors regarding you suspiciously if you get your valuation wrong. You need to be sure that you have neither undervalued nor overvalued your business. Another thing your investors will look at is the plan of how you want to spend the money you raise. Ensure to make the right projections for spending, operations, and the rest of them.
