Ways to Raise Funds for Start-ups

By: Zain Nabi  |   April 26th, 2013   |   Business

Fundraising for a start-up is as important as building a solid team and coming up with a fresh perspective for your business model. It involves careful planning and A LOT OF preparation, I mean it. Many start-ups do not sustain in the longer run because they eventually fall short of funds that forces them to close their enterprise. However, there are many examples of successful entrepreneurs who have excelled after receiving funds from interested investors.

 

So what is the difference between those who get the funds and those who fail? Those who allure investors are just a bit more focused and organised and know exactly what to do in order to secure funds. We have got some tips from Michael Skok, partner at North Bridge Venture Partners, about how to raise funds for a start-up. In a recent workshop, he highlighted different aspects an entrepreneur should consider before contacting investors.

 

According to Skok (via Kyle Alspach of Boston Business Journal), it is not always necessary to raise funds. This does not mean that you should leave your enterprise as it is. In fact, this philosophy calls for utilising all the available resources on part of entrepreneurs rather than contacting and relying on sponsors.

 

One of the best times for start-ups to attract investors is when they are new and fresh. They can translate their energy and enthusiasm into a compelling pitch. It should be noted that your pitch is the most powerful tool you can use to attract investors so do not keep any loose ends.

 

You can also go to investors once you have something to show them. It means you can plan your work and start its execution. Hire some people, build an online presence and enter the market. Once you have done all this you can visit investors and show them that you have already done some work. This might help some investors to take interest in your idea.

 

While meeting investors you must not bombard them with all the information about your project. Instead, take some time to introduce yourself and your team and try to develop some friendly, but professional, relations with them. Give them an overview of what your idea is and how it can succeed. Remember: Be honest.

 

At the end of each meeting you must evaluate what the investor feels about the idea. You can ask them directly or in a subtle way for their opinion. This will give you an idea about the intensity of interest they are showing. If you feel they might not be interested in funding you, do not waste your time and move on to the next investor.

 

Photo: TechCocktail