Fundraising is one of the biggest challenges which all founders face. Some startups handle the challenge faster, while other keep on struggling, because they have no clear idea of how, when and from whom to raise money from.
Well, these most common questions, i.e. how much money to raise, when and whom to raise it from have no specific answer, because the standards vary and answers are very much based on your actual business idea. So, a wise idea is to devise your own plan according to your own unique circumstances.
But, here I must share a useful tip I heard from successful fundraisers and it says, “Raise money when you don’t need it”.
You may be surprised, but that’s a fact that when you are in desperate need of money, it’s hardest to get some.
Have you ever found a bank offering credit card to unemployed? Certainly not…. They offer credit cards to only those from whom they sense the return.
Funders are also experienced people like bank and they can sense your desperation, so even if they lend you some money in the desperation time, they are surely going to take advantage of this.
Now, in the other situation, when you are doing well, and the investors are confident that your startup can do things at its own, they will be more than happy to give you money on your terms! That’s because they know that now you can multiply their money!
- Work on a business plan first, which will identify the hotspot for your business.
- Stick to the business plan and focus more on profitability.
- Be ready for the funding in parallel.
- Once, the profitability is ensured, push fundraising campaigns.
- Prioritizing profitability allows you to have the luxury of time that you can utilize for setting up a competition between prospective funders!
- Remember, the best way to get money from a rich man is to promise to double it for him!