Are you in the hunt of fundraising to build your startup? Yes, funding is crucial for any startup to nurture their venture. The evolving startup ecosystem has produced a plenty of tangible opportunities for startups to grow. If you’re looking to raise funds, here is a list of ways to raise fund from
• Incubators and accelerators
• Venture capital firms
• Angel Investors (Individual Investors)
• Super Angles
• Small business grants and community assistance
• Partnering with app developers
But before raising fund through above ways, make sure you follow considerations listed below.
9 Things to Consider Before Raising Funds for Your Business
1. Make sure the market is ready for your idea
Analyse your targeted market deeply. For example, if your app functionality that can only be driven by 5G network, you should make sure 5G network is accessible for targeted customers. Broadcasting idea at the bad time (or earlier) where the targeted market is too far from adopting it is where most of the startups fail.
2. Never have more than 3 founders
Having more than 3 founders may lead to internal disputes. Having 2-3 founders is a perfect choice. In case you require more experts, you can always recruit them.
Having 1 founder is also a bad option. There should be at least 2 founders, so different perspectives and expertise can effectively tackle abruptly arising circumstances.
3. Pick the right mentor (s)
Mentors are a prime requisite for any startup to grow in today’s juggernaut startup ecosystem. In fact, mentors closely watch industry happenings and give timely assistance to hold the venture up during up and downs. A mentor should believe in your idea and ambition. Make sure you have the right one.
4. Validate your app idea twice before presenting
You can’t approach investors with a half-boiled app idea. Instead, make sure your presentation is well-crafted with a well-built app (or well explained app’s core features). For example, companies like Big Basket and Byju’s have raised millions of funds from global venture capital firms, including Facebook CEO Mark Zuckerberg who funded Byju’s, where the apps were developed by FuGenX Technologies, a mobile app development company, had a significant impression.
5. Have maintained your accounts well
You should have a comprehensive list of expenses of the previous and the upcoming months. This helps you keep track of how money is spent and how much money will be required. While reaching out to the investor, you can show them your accounts and logistically present the amount of funds needed.
6. Have financial stability in your personal life
Before jumping into your venture, make sure your all the debits are cleared. And also make sure your personal savings and credit cards are in place.
7. Limit family money
Make sure raising fund from your family won’t spoil your relationship. You can’t pose your personal reputation for risk. So family money should not exceed more than 5-10% of the total investment.
8. Consider funds as bonus
Make sure your personal investment & revenue form the major part of your total investment. In case the external source forms the major part, you may be pressured to return the investment as soon as possible. If you’re pressure free, you could better run and control the company.
9. Meet 2-3 investors to understand fundraising world
Meeting an investor can be a learning experience. Listen to their questions and make a note of it. The more you will meet investors, the better you understand loopholes in your app idea.