In my previous post, I discussed taking the slow approach when getting your business off the ground. In this installment, I’m covering the patience in fundraising.
Fundraising is one of the most vital and most challenging tasks you will be faced within the course of running your business. It’s a rare case where investors are lining up to give a startup anything and everything they want, so raising money requires hard work, perseverance, and most importantly, patience. No one enjoys the process of perfecting a pitch and presenting, so it’s understandable to get frustrated with the process as it drags on. But being patient and diligent and aligning your company with the right investor is vitally important for the future of your business, and ultimately worth the wait.
Fundraising is made all the more challenging for the crowded landscape, with a myriad of startups popping up all the time to compete for the same funding dollars. In those circumstances, it might seem necessary to try any and all approaches to fundraising in the hopes that one will work to grab the attention of a venture capitalist. But having a wildly-varying plan is akin to having no plan at all and won’t serve you well in trying to actually land funding. Before you start the fundraising process, develop a focused plan that outlines the types of investors you’d like to pitch to and how you want to approach getting those meetings. Having that plan offers a way to continue moving forward when you hit the inevitable setbacks that come with fundraising.
When you’re going out in front of venture capitalists, it’s important that you understand what you’re offering with your company and your product. The “how” of what your product does is important, but investors will want to know about the future prospects and how your company can grow and evolve. Part of your preparation for fundraising should include plotting out all of the future steps for your company, with realistic objectives in mind for growth and progress. While confidence in your business is good, trying to project too much of it might come off as bluster and delusion that detracts from what is an otherwise strong pitch. We have all heard of the disasters in over-promising and under-delivering.
Part of running any business is making compromises, and that can be the case for fundraising as well. Not everyone can get everything they want when looking at offers from venture capitalists, and finding the right offer can be quite different from finding a perfect offer. The key to choosing the right offer for you and your company is understanding the things that you’re willing to compromise on, and those that you aren’t. As much as you may want or need that round of funding to grow your business, you have to weigh if it is worth the trade-offs required, and if not, you have to be willing to walk away from what might be a tempting offer. It might not ultimately be worth what you’re getting if you’re having to give up more than you’re comfortable with. Always listen to your gut feeling!
The right offer also might not be the one with the biggest dollar sign attached to it. It would stand to reason that the more money you get for your company, the better, but those offers might have conditions or expectations that you’re not comfortable with in exchange for the larger sum. The right offer is the one that most closely meets your wants and needs with requirements that you can live with. Further, more than just money, the right investor should be able to help you in other ways to grow your business. Having an investor is a partnership in your business, and as such you should also be looking for the connections and influence that potential investors can leverage for your company. Finding an investor who can open the right doors for you and offer the right kind of guidance is invaluable, even if their financial contribution is smaller than what might have been offered elsewhere. After all, finding success in business requires not just money but the right strategy and opportunities.
Patience can be difficult when you’re feeling held back by a lack of resources to grow your business. But finding the right investor, even if it takes longer, is a far better strategy for your company than taking whatever offer comes your way. #onwards
Read my next post as we shift gears and talk about having fun at work.