As an entrepreneur, you are entitled to feel proud that you are going against the tide and launching an innovation-laden, self-driven tech startup. However, you can never expect your business to take off without adequate funding. And fundraising is something that just about all tech entrepreneurs have to struggle with as they start their businesses.
Out of 10 businesses, 8 eventually crash out, meaning that 80% of entrepreneurs are likely to fail due to a lack of cash. And this is just the beginning of the problem. The bigger issue here is that getting funding for startups is today harder than it was in the past as there too many new businesses fighting for the funds.
In the end, investors are setting higher benchmarks for startups because they want to make sure that the money is put into a concept with a bright future. To achieve this, as an entrepreneur you need to set yourself apart from thousands of equally driven startup founders and do things differently. Here are 4 ideas that can make your funding efforts bear fruit faster.
Without investing in your own business, regardless of whether you can actually do it, investors will not put in their money either. Your potential investors are smart and know what they are getting themselves into.
They will always want to know whether you know what you are doing and one way you can indicate your confidence in the idea is by putting in some of your own cash, blood and sweat; this can leave you exhausted. Many would-be many entrepreneurs turn to nootropics from Corpina to help them keep the focus and alertness stay on track into the wee hours
Test The Market
Before you even approach your closest friends and relatives for funding, you need to ensure that your product or service is viable. This process of testing how well your product fits in with the market through continuous testing is critical to gauge demand and accuracy of your positioning. You can also get critical proof of demand data through research, prototyping and user interviews.
The data you gather from the market will also serve as evidence that your product does actually work and there is demand for it as you pitch to potential investors. While lack of funding is a major impediment for many startups that prevents them from launching, 40% of those who do make it off the ground eventually fail because of lack of a viable market.
Master Your Business Plan
The business plan you present to potential investors will make or break the deal. You, therefore, need to ensure that you go beyond mere superficialities and instead show the investor that you do know the plan inside out. Apart from that, you need to show that you have a measurable strategy for getting from point A to B.
Study your competitors and target audience as well as extrapolate the financial metrics and overall vision of how you intend to run your business. If launching a product, offer a specific date and mention specific tools you intend to use, for example Clockspot, an online time tracking software, or Dharma B2B credit card services.When you go the extra mile as you share your business plan, investors will sit up and take notice.
Focus On Specific Investors
Due to the urgency of funding, some entrepreneurs overlook building a strategic plan for targeting specific investors. The “pitch to as many as possible” strategy may not work; instead, focus on pitching to investors that are already interested in your target customers.
While you can accept money from just any source, the main idea here is to get smart funding from investors that add value to your business. Often, interested investors may be found among your friends and business associates who may introduce you to those they already work with and have a relationship with.