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How To Raise Funds

This article is written by Brian Malika, a Contributor Author at Startup Istanbul.

Michael Seibel is the CEO and a partner at Y Combinator which is an American seed accelerator that welcomes start-ups from across the world.

When approaching investors for an investment fund for your start-up, you must ensure that you don’t come up with a huge budget plan for marketing and advertising when in fact you’re pitching an idea that has not been exposed to the market yet. Investors want to see how the idea builds up from scratch al the way into a product or service that will be exposed to the market and the customer reaction. So, don’t be quick to ask for marketing and advertising money when you haven’t evens called your business idea in the first place. Chances are that the investors will not take you seriously.  Ask for an investment fund that is reasonable to what you need to spend in order to scale  up your start-up

When raising money for your start-up, avoid asking huge huge sums of money to be allocated for allowances and salaries for the founders. When you do that some investors start to question the motivation for the formation of your start-up. Like, are you in for the money or for progressing the business idea. 

Therefore, make sure that you ask for investment funds that concentrate more on scaling up your start-up more than the financial benefits that the founders will get. If possible, the founders should not ask for any salaries or allowances within the budget being presented to the investors.

Do not be nagging and helpless to the investors so that it appears if your start-up is not given the investment money then that would be your end. Investors actually get pissed off with helpless start-up founders who would go to any length to be awarded an investment fund. So from today be professional in how you ask the investors to award you the investment money.

Stick to the scheduled meetings with the investors and if an investor delays to show up for a planned meeting just let them know that you will not be available until a new meeting is planned. Let each investor that you pitch to have that feeling that you might be talking to another investor somewhere and in so doing investors will be curious to work with your start-up as they don don’t want to be left out due to anticipation.

Lastly, while pitching, make sure you showcase how you have grown as an entrepreneur and why the current start-up that your fundraising to scale-up is a development from your previous growth as an entrepreneur. Investors want to see the potential for your growth link up the system so that they can predict what might happen in future. Do not pitch your business idea out of the blues without linking the same with your previous growth as an entrepreneur.

Keep in mind that the secret to successful fundraising for your start-up is to appear that you are not desperate for the money and that in fact your ready to walk out of the negotiation room if your business idea is not given enough promise to thrive through the proposed partnership deal by the investors. Trust me investors like to work with entrepreneurs who are confident with their business ideas.

18 July 2019

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