Looking to get your Startup Funded? Before Going to Investors Knowing a Few Inside tips from Founders & Investors.
Hi Every One Today We Will Talk About 10 Great Tips to Raise Funding for Your Startup
Explain Ur ‘Why’
Explaining the Reasons “Why” you’re on your Startup’s Mission During Your Pitch is Very Important. Peggy Choi the Founder & CEO of Lynk who has Raised US $1 Million for her Platform Dedicated to Connecting People to the Right Experts for Advice, Insights, and Knowledge.
She says, “Be Able to Articulate Clearly ‘WHY’ your Startup Needs to Exist and the Problem it is trying to Solve. If you know the ‘Why’, You Will Figure Out the ‘What’ and then the ‘How’.”
Keep Working Prototype Ready
As the Startup Scene Matures and Investors Get More Savvy, You can No longer Secure Funding Based Purely on an Idea.
Asif Ghafour Who’s Raised US $3.5 Million for his Real Estate Tech Startup, Spacious.
He Explained, “I’ve Met People before Who are Trying to Raise Money Based on an Idea. My Opinion, and the Consensus in the Room, is that Don’t Even try to Raise Money Before You have a Working Prototype to Show Someone. Startups Ultimately Come Down to Execution”.
Expansion Plans (Overseas)
You Need to Clearly Demonstrate your Plan to Scale Overseas to Make it A Worthwhile Investment Opportunity.
Abby Zhang, Co-founder of E-commerce Atartup Yeechoo, Hong Kong Based Startup Successfully did this and Raised Funding from Alibaba Entrepreneurs Fund for her Online Designer Dress and Accessory Rental Sharing Platform.
She says, “In Hong Kong, Investors are particular Concerned that some Hong Kong Based Companies can Only be a Profitable Boutique, rather than Scalable Regional or Global Business.”
A Detailed Plan
Many Startups try to Raise Money without a Clear Idea about How Much they Want to Raise, What they Plan To Do with the Money, or How they Plan to Execute.
Kevin Kwong is the CEO of The Aria Group and Regularly Invests in Startups in Hong Kong. He says, “For an Investor to have the Confidence and Conviction to Invest into a Private Company at an Early Stage, It is Extremely Important to Provide as much Information as Possible that Shows How you think about How you can Grow the Business.”
Choose Uncomfortable Markets
David Chang is a Partner at MindWorks Ventures and has Invested Over US $17.3 Million into Startups to Date.
He’s Seen Multiple Companies Approach Him and say, “We’re the Uber or AirBnB of the Future.” But He says, “Most of these Models aren’t Actually Workable Nor Scalable.”
Chang Suggests, “Find your ‘No-Man’s Land’ and be in Sectors & Verticals Where it’s Unsexy or Uncomfortable, Not Under the Spotlight, and you have Zero to Little Competitors.” Sometimes, the Best Businesses, as David say, “Were Built when No One Was Looking.”
Fundraising is Like A Marriage
The 2 are Actually Very Similar. They’re Both Long term Commitments which are Extremely Difficult to Get Out of – Especially if things Doesn’t Go as Well as First Planned!
“Finding an Investor to Back you is like Finding a Girl who will Marry You,” says Shing Chow, Who Raised US $60 Million for his Startup Lalamove (EasyVan). “You just to have Meet Enough of them to Find the Right One. You Need to be Able to take Rejections, & You Need to have a little bit of Luck.”
Demonstrate High EQ & Soft Skills
Not Only will an Investor Analyze the Startup’s Business Model, but they’ll also Evaluate the Entrepreneur.
Roland Yau is the Managing Partner at CoCoon Ignite Ventures who have a US$10 Million Investment Fund which has Invested into 8 Startups.
“It’s Important to Demonstrate High EQ and Soft Skills, as Running a Company is a Very Tough Job and Founders Will Experience Great Emotional Ups & Downs,” says Yau.
Keep this in Mind, as it’s Not only Your Business which are Scrutinized, But Your Personal Attributes too.
Create Networks & Be Proactive
Luke Grana who is the CEO & Founder of Grana, a Fashion Startup Creating Essentials from the World’s Best Fabrics.
He’s Successfully Raised US $16 Million and Recommends, “Be Proactive and Go Out to Meet Potential Investors. One Investor can Introduce you to More Investors or Strategic Partners, Helping you Get Your Innovative Idea from Concept to Reality.”
This is a Big Advantage of the Startup Scene. It’s Incredibly Easy and Convenient to Meet Investors via Meeting People by Attending Events and through Social Media.
Use Visuals & Catch Attention
Investors Get Pitched Every Day with Standard and Boring Presentations.
Ming Lee, the CEO of CAIDO CAPITAL, is an Early Stage Investor and Advisor to Many Startups.
She Emphasized that During a Pitch, You Should, “Be Creative and Use Visuals to Get Your Message Across. ‘A Picture tells a thousand Words’, So Don’t be Afraid to Use More Images than Text in Your Presentation.”
Focus On Financials from The Start
Most Investors You’ll Meet Generally have Backgrounds in Finance, Compared with Silicon Valley, where their Backgrounds are often Tech Related.
Raphael Cohen is the Co-founder of HotelQuickly and has Raised US $5.56 Million for his Startup which Allows Users to Book last-minute Hotels in Asia.
He Recommends, “When it Comes to Post-seed Rounds of Funding, Investors Look Particularly into the Unit Economics of the Business. The Cost of Acquiring a Customer Needs to be Lower than its Lifetime Value, and Demonstrate a Reasonable Payback Period for each Marketing Dollar Spent.”