5-Keys to raising money for your Business

1. Know that funding is a progression. No matter how cool your company or idea, you’re generally not going to receive a $10 million check from the get go. Rather, you will typically raise several “rounds” of capital. You start with smaller amounts, and then as your business makes progress (and your valuation increases), you are eligible for larger rounds of funding.

2. Find the right sources of funding for now. As mentioned above, some forms of funding are much easier to raise than others. And based on your stage of development (e.g., startup vs. established business ready to scale), different forms of funding are more relevant. The key is to go after the right sources. No matter how good your venture is, if you go after the wrong funding sources, you’ll fail. Even Google failed when it initially targeted venture capitalists (Google then successfully raised funding from angel investors, and went back to venture capitalists thereafter).

3. Cultivate relationships early. Even though you won’t get the $10 million venture capital check today (if you haven’t raised money before), you CAN start forming relationships with venture capitalists who can write you a $10 million check tomorrow. According to Fred Wilson of Union Square Ventures, “The perfect entrepreneur/VC relationship is one where each has established respect and trust with the other well before an investment transaction is broached.”

4. Create your business plan now and keep it up-to-date. Your business is always changing. And as it changes, different forms of funding become available, and you’ll come across different types of lenders and investors. Importantly, when you meet a lender or investor, you must be able to give them your business plan in a timely manner. So finish your plan now, and keep it up-to-date, so you can send it off at a moment’s notice.

5. Always be a marketer. In raising money, the best company doesn’t always win (in fact it often doesn’t win). Rather, the best marketers win. That is, the entrepreneurs that are best able to market their companies to lenders and investors are the ones who raise the money. Their marketing efforts are aided by the PR they receive from winning Challenges. In many other cases, it’s the entrepreneur marketing themselves via networking, sending emails, making telephone calls, getting and leveraging Advisors, etc.

Help You Grow!

*God Speed*

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: