When is the Best Time to Raise Money for My Startup?

Startup fundraising is one of the biggest challenges which all founders face. Some startups handle the challenge faster, and raise a huge amount in less time, 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, i.e. a plan with clear financial goals for the startup.

While you are working on identifying the financial goals for your startups, you will find that there are a lot of options to fund your startup. Creating this plan is important, because by the time you are done with this research you should already be able to find the right funding model for your startup.

Coming back to the point that when actually you should raise money for your startup, let me share a very useful tip first that I heard from successful fundraisers and it says, “Raise money when you don’t need it”.

When is the Best Time to Raise Money for My Startup2

You may be surprised, but that’s a fact that when you are in desperate need of money, it’s hardest to get someHave 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.

The wisest act for desperate times is to have an emergency startup funding plan ready right in the beginning.

Startup investors 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, i.e. in terms of control over decision making process, shares etc. You might consider options like online installment loans, meeting business emergency with vehicle as a collateral, and merchant cash advances, but these can be quite expensive in that particular time.

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! Here’s a quick article that explains how investors value a startup before actually investing in it.

You might consider planning a crowdfunding campaign right from the beginning and launching it at the right time when your startup is creating a hype.

Key Takeaways:

  • Work on a business plan first, which will identify the hotspot for your business.
  • Stick to the core business plan and focus more on profitability.
  • Be ready for multiple funding options 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 investors!
  • Remember, the best way to get money from a rich man is to promise to double it for him!

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