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BETA
Why do you want to raise funds?
Do you really need to raise funds?
You wouldn’t be here unless you were thinking about fundraising, but please pause until you’ve exhausted all other possibilities. Fundraising is a difficult, painful and slow process. There are no guarantees that you will successfully raise the funds you seek on reasonable terms, or at all. More fundraisings fail than succeed, and many entrepreneurs end up in bad relationships with outside investors. You may be better off spending the next 6 to 12 months growing your business instead of focusing on potential investors. You won’t want to hear it now, but not raising funds may be your best option.
Why?
If you need to raise funds, then clearly you will be able to say why. From an investor’s point of view, you will need a precise explanation of exactly why you need their money. It sounds obvious, but many companies try to raise funds without a sufficiently detailed understanding of how they will spend the money and what they expect to get in return. This isn’t a question of writing a sensible business plan. If you don’t have a credible and exhaustive understanding of the dynamics of your business (where each $/£/€ will be spent and why it will pay for itself), you shouldn’t be doing this.
Why now?
If you need to raise funds, then why do you need to do it now? Is there some external driver such as being first to market or capturing market share when it is important to do so? Or is there an internal driver such as you don’t have enough salesmen to generate revenue now your product is starting to sell, or your early sales have shown that your products need further development? If you don’t have a good reason why you need to do this now, then don’t do it now. Build your business until you really do need the money.
What are the alternatives?
There are always alternatives to fundraising. They may not seem as attractive as a wheelbarrow full of cash, but there may be better solutions for you to grow your business without outside investment. Consider cutting all costs which aren’t critical to growing the business to stretch your existing cash. Think about how you actually make money, and whether you can do better by targeting different customers, changing how you sell your products, or even whether you are selling the right products in the first place. Consider whether your current business model is sustainable and scalable, even with an injection of cash, and whether you should change it.
Do you really need to raise funds?
You wouldn’t be here unless you were thinking about fundraising, but please pause until you’ve exhausted all other possibilities. Fundraising is a difficult, painful and slow process. There are no guarantees that you will successfully raise the funds you seek on reasonable terms, or at all. More fundraisings fail than succeed, and many entrepreneurs end up in bad relationships with outside investors. You may be better off spending the next 6 to 12 months growing your business instead of focusing on potential investors. You won’t want to hear it now, but not raising funds may be your best option.
Why?
If you need to raise funds, then clearly you will be able to say why. From an investor’s point of view, you will need a precise explanation of exactly why you need their money. It sounds obvious, but many companies try to raise funds without a sufficiently detailed understanding of how they will spend the money and what they expect to get in return. This isn’t a question of writing a sensible business plan. If you don’t have a credible and exhaustive understanding of the dynamics of your business (where each $/£/€ will be spent and why it will pay for itself), you shouldn’t be doing this.
Why now?
If you need to raise funds, then why do you need to do it now? Is there some external driver such as being first to market or capturing market share when it is important to do so? Or is there an internal driver such as you don’t have enough salesmen to generate revenue now your product is starting to sell, or your early sales have shown that your products need further development? If you don’t have a good reason why you need to do this now, then don’t do it now. Build your business until you really do need the money.
What are the alternatives?
There are always alternatives to fundraising. They may not seem as attractive as a wheelbarrow full of cash, but there may be better solutions for you to grow your business without outside investment. Consider cutting all costs which aren’t critical to growing the business to stretch your existing cash. Think about how you actually make money, and whether you can do better by targeting different customers, changing how you sell your products, or even whether you are selling the right products in the first place. Consider whether your current business model is sustainable and scalable, even with an injection of cash, and whether you should change it.
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Raising funds
Raising funds
