Ask any entrepreneur about fundraising and the vast majority will tell you it’s a nightmare. But it doesn’t have to be.
Here we breakdown the most cited funding obstacles faced by entrepreneurs and how one can tackle them.
- Creating a scalable business model
You hear the big NO when you cannot convince investors of the scalability of your business. Your business model should show the potential to increase revenue without increasing costs equally.. Work on examining your processes and focus on core competencies. Outsource non-strategic tasks and incorporate automation where possible. Identify roadblocks and strive for continuous improvement with an open-ended strategy.
- Determining the funds needed
Asking for more isn’t always merrier. You should know how much funding you need by writing a business plan with a realistic financial model. Justify and detail every cost and what the fresh funding would be invested in. Set SMART goals to grow your startup using the funds and share it with investors. Lastly, demonstrate a financial model that is cash flow positive.
- Finding the right funding option
As a business owner, finding the right capital partner can be extremely stressful. Mostly during the initial stage, entrepreneurs work off their personal investments. However, as your business grows you will need more than one option to keep your venture growing. Your options could include angel investors, bootstrapping, bank loans, crowdfunding, venture capital or the increasingly popular non-dilutive model of revenue-based financing. Before you make a shortlist make sure to read about the advantages and disadvantages of each.
- Spending the funds wisely
Once you’ve closed your fundraising and have fresh capital to deploy, do so responsibly. Remember you are accountable for how you spend it or rather how you projected you would spend it. Be transparent if there are unexpected changes and stand by your growth plan. Spend mindfully versus luxuriously. Remember to take the guidance and support of your trusted investors when required and be honest.
If you are still nervous about getting funds for your startup and want some expert guidance, you can set up a 1-0-1 talk with a founder of your choice at https://foundersforfounders.org/
And if you are an entrepreneur wanting to supercharge your growth, you can apply at https://getvantage.co/