This guest column is by Vinamra Pandiya,Founder at Qtrove.com
There are various sources of funding a startup can look forward to. Right from angel funding to VC funding, the process itself can be quite strenuous for a new age entrepreneur. Here’s a quick guide on mistakes to avoid when going for the big pitch meeting:
- Have a clear idea of what you wish to achieve from the funding – More the merrier always sounds like a better place to be in, but in reality it’s not a good idea to chew off more than you can bite. It’s important to note that VC funding is usually approached after a couple of successful rounds of angel funding and seed funding. Hence, when approaching a VC firm, have a justification backed by facts and results for the funding you wish to raise. This ensures that you come off as a leader in complete control of his company with a clear focus on immediate and future goals of the startup.
- Get your team right – Ensure that your team is up for the next task. A well balanced and motivated team is your key to ensure minimum hurdles when work and stress is on the rise. A great team and a low attrition rate is a like shining badge that a startup can proudly wear on its armour when approaching any investor. Most startups fail because their team is not ready to handle the pressure of an exponential growth and a lot of VCs agree on this fact that at important junctures, teams become dysfunctional under stress and that finally affects the company.
- Find a mentor – Go for a player who is very well versed with the rules of the startup game you are a part of. It’s not necessary that a CEO of a big corporation will be best suited as a mentor as he may not be aware of the nitty-gritties and possible pitfalls. Select someone who has contacts that you can leverage and at the same time guide you while your company finds its ground. A reliable name as mentor to the company helps heaps when approaching VC firms for funding and hence it’s best getting a proven performer on board.
- Adapt to the startup vocabulary – Imagine a situation where you are excited to shift base to Japan and obviously everyone there speaks Japanese. On reaching, you wish to communicate with the locals for assistance but don’t know their language – not a great thought right?! It’s the same when raising funds. Take some time to learn and adapt to the startup lingo before heading for VC funding. Understand how market valuations work and when comparing your startup to another, make sure you don’t compare apples to oranges. Never go to a venture investor with sky high valuation figures, especially if you aren’t experienced in the startup space.
- Never carpet bomb investors, choose your pick – There are numerous start-ups that randomly share half-baked business plans with VC firms and investors. Such plans usually lie in recycle bins and never see the light of the day. Never send a plan to every investor in the book. Identify and target select investors. Work towards a referral that can introduce you to a VC firm or investor as a referral immediately adds little more trust in your startup.
Lastly, understand that failure and success are two sides of a coin. Most startups don’t realise that the real problem is not failure but what one does when failure knocks on the door. So, get moving, re-look at your pitch and give your best shot!
Image Credit: Basecamp