1. Startups

The Art of Doing Startup Fundraising

Understanding the right way to raise funds for the pre-seed, seed and A-series stages

The fundraising process for new startup owners can be lengthy and pointless if not done properly and it can hinder business development. Although there are many factors, the main cause of delays in startup fundraising is the lack of interest and interest from investors to invest in startups that are being built.

The following article will try to explore the important points that should be done if you want to do startup fundraising, as shown below written by Techstars Managing Director Alex Iskold.

[See also: Optimizing Fundraising for New Startup Founders]

Self evaluation

Before you get ready to do your startup fundraising, take another look at the business you're running. Is it time to do a fundraiser? Are you as a Founder ready to do the process?

The good thing is to make sure your product is finished and ready to launch. In addition, prepare yourself as a Founder to meet directly with investors and bring pitch deck completed prior to fundraising.

The stronger your intention to raise funds, the more prepared and disciplined you are, the higher your chances of getting it done quickly.

Create a complete list of investors

After you've done your self-evaluation, the next step is to make a complete list of potential investors you want to approach. That way, if you get rejected by one investor early in your startup's fundraising process, there are still plenty of other investors to approach.

If you don't currently have a wide network of investors, don't force the fundraising process. Do socialization activities first by attending a variety of relevant activities, such as joining the startup community and other activities.

Make sure you get acquainted with investors and promote yourself. Run this activity until your list of investors continues to grow in number.

Understand input from investors

When the fundraising has been done, make sure you receive it well and of course understand everything feedback from investors. Pay attention to the corrections and criticisms submitted. Try to answer all questions with relevant answers and don't force your ideas on investors.

Most investors don't believe in your ideas and products, nor do your target market, customer acquisition strategy, and so on. Whatever the reason, try to accept everything feedback The.

Do your research and find out as much information as you need. Thus, when it is time to meet again, you already have complete and accurate data to support the product being built.

Create a fundraising strategy for each initial funding round

Startup fundraising also requires a strategy in each round. You can start making strategies for startup fundraising from pre-seed funding, continues to seed funding, up to the series A funding round.

[Read alsoFundraising Tips from Co-Founder Telunjuk Hanindia Narendrata]

1. Pre-seed funding

If your startup is currently at the pre-seed funding, don't be in a hurry to meet venture capital or investors on a large scale. It's a good idea to try to offer your idea as well as your business with the closest people like parents, friends, or family first. At this stage you also ideally have enough personal money that can then be used for product development.

Another way that can be done is to get acquainted with related parties such as: angel investors, who usually do not have large funds but at least are able to finance your needs in the early stages.

Currently, there are many potential investors who specifically provide funding to startups at the stage pre-seeds. CFind out which investors you can approach and which could be an opportunity for fundraising.

At this stage, what needs to be considered is that investors will usually see how far your business has gone to what processes you have done. All milestone That's what usually becomes a reference for the success of a startup.

2. Seed funding

seed funding is a continuation of pre-seed funding and usually will also be a benchmark for how much funding will be obtained. At this stage, startups usually have traction and already have consumers.

Ideally, you should try to approach angel investors and other investors. Target too venture capital focusing on small-scale funding. Avoid meeting with venture capital most of them will just think your startup is too small to get funding.

You can also raise a small amount of funding at this stage, but more than one investor. That way you can create the right financial model for your startup.

It's always better to start [at] low and then, on demand, be oversubscribed than to start [at] high and never hit the target.

3. Series A funding

In the series A stage, fundraising will become more difficult to do. As Founder, you must have a proper matrix for grading. If your startup has got revenue, the assessment will be seen from MRR/ARR and MoM Growth. Even so, the right matrix and good preparation do not guarantee your success in getting funding.

Make sure to always receive all feedback from investors and provide regular reports and information to investors related to startup developments.

The key to success in this stage of series A is finding the right VC, looking and looking businesses appropriate. If you still can't achieve these two aspects, it will be difficult to successfully raise funds in the series A stage.

Fundraising is not an easy process and can drain your mind and energy. Do this process well so that your startup can grow.

Don't hesitate to share your experience with Founder others in order to get an overview and information related to venture capital and get useful tips. If possible, do fundraising with the help of an advisor you trust. That way you don't have to do the fundraising alone.

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