Often during the course of running a business, fundraising can take a backseat and founders struggle to find the time to focus on fundraising strategy and activities. As a founder, while this may give the sense that you’re focusing on what really matters, it may often be slowing down the progress of your business and prevent you from scaling and growing faster.
It is important to know that raising the first startup capital is the trickiest. This may be easier if you are a serial entrepreneur who has already had a successful exit or two, and has a close network of viable investors eager to fund something. Out of the hundreds of thousands of business startup attempts each year, most founders aren’t in this bucket.
It also takes much longer to raise money than most founders imagine, so unless you’re taking out time consciously and planning to raise money, it won’t happen soon enough.
These 5 tips can help you keep an eye on the fundraising ball in an easy and manageable way, while also making sure you build and grow your venture.
Map your Runway
How badly do you need that money? Mapping your financial runway and cash-flow situation gives you a clear picture of how business-critical this raise will be for you. If you find you don’t urgently need money for day-to-day operations or for business expansion, then your motivation to raise money won’t be very high. However, if you do see that you’ll run out of cash soon – then you can start working towards the situation actively. Make sure you don’t wait till the very end, because funding can take anywhere between 6 months to 1 year if you’re well prepared.
Add fundraising to your daily to-do list
Let’s face it, unless it’s on the list, it will never happen. Make sure you’re reminded each day you need to raise the money and keep it on your daily list of tasks. Map progress against it regularly to see how far you’re coming along.
Break down fundraising into smaller tasks
Fundraising as a term can seem overwhelming and unattainable, however if you break it up into smaller tasks, you’ll learn it can become far more manageable. For instance, creating a list of potential investors, finalising numbers for a pitch deck, formatting your presentation, researching investors, marking down the annual funding calendar etc are some of the many tasks that can be done measurably and get you one step closer to getting funded.
Look out for all opportunities
Educate yourself on types of funding and don’t just keep waiting for one specific type. Keep an eye out for $$$ through different opportunities. Whether they’re grants, awards, revenue based funding or more. Don’t just wait for equity funding, it can take a long time to manifest and needs extensive due diligence. Smaller and diverse funding sources will help prop up the business by small injections of cash to get the right staff and resources involved when you need them the most.
Use your lunch and coffee breaks to network
Look beyond your current network and set up coffee or lunch meetings with potential investors. Set aside at least one lunch and coffee slot per week for this purpose and scan your Linkedin networks to find more investors who could have business synergies with your venture.