Startup fundraising is a pain in the you-know-what. Win the hearts (and wallets!) of your investors with these simple fundraising hacks from Jayesh Parmar, CEO and Co-Founder of crowdfunding and event ticketing platform, Picatic.
You’ve earned your first customers, you’ve gained some momentum, and now you’re finally ready to look for some outside investment. Easy? Of course not. Like anything else in the startup life, fundraising is a tricky business, and going through the motions can either make or break your company’s success.
Having raised plenty of cash himself, Jayesh Parmar, CEO and Co-Founder of Picatic, will be the first to tell you that the dance between entrepreneurs and investors is anything but a smooth performance. However, with the right moves and dedication, there are ways to tango your way to success in earning your first round.
So, what are these “magic moves” that will help you woo and dazzle your next VC? Jay gave us five:
1) Start Early—“As soon as you make your first dollar, start fundraising,” he recommends. Naturally, you’ll get a “no” on the first go, but once you gain speed and later return, at the very least, you’ll now have that previous connection.
2) Show Traction— Prove that you have ample revenue and/or users. Know your numbers, and be prepared to be grilled on the data.
3) Maintain A Good Legal Reputation— Nothing screams “red flag” like a few blotches on a company’s record. Stay in good standing, and know your terms.
4) Stay Visible—“You could be the best hockey player in the world, but if the NHL is only drafting in North America, and you’re in Columbia….well…then who cares?” says Jay. If you’re a phenomenal company but you’re not in a startup hub, chances are, you’re not going to be seen. Put yourself in the right place at the right time.
5) Bring Your A-Team —“If your team is remote, or not full-time, those are big warning signs for venture capitalists”. Investors want to see a solid team that can handle the ups and downs of a company. Ask yourself- will your gang be able to handle the ride if things get rough?
Put lightly, Jay likens fundraising to “getting kicked in the teeth again and again and coming up smiling every time”. So prepare yourself—build the right team, know the right numbers, and create a strong enough reputation to make yourself irresistible when the time is right.
…oh, and maybe invest in a good mouthguard while you’re at it.
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This is a post by Jackie Murchison. Jackie is Community Coordinator at Launch Academy. Follow her on Twitter @JackieMurchison