LET’S GET STARTED
One of the most exciting times when running a startup is the moment when you’re finally ready to go and get some seed funding. Raising funds isn’t just about the growth of your startup - once you start to get seed money, it’s a real validation of your startup. People are interested in you! However, you can’t just rush into looking for seed capital.
We’ll cover the key steps a business should take to ensure they’re ready to go out and start raising funds whether it be through angel investors or venture capital firms. If you’re interested in learning how to raise money for your startup - this checklist is for you.
Step 1: A Minimum Viable Team
The first thing you need to establish after you are finished pre-seed funding is what is known as an MVT - a Minimum Viable Team. You’ll see throughout this checklist that seed funding is, in many ways, all about appearances. Before venture capitalists fund your venture with seed money, they will want to ensure that your company is ready for growth.
One of the best signs that your company is ready to receive capital is if you have the right people in place. Investors will want to see that you have already started filling roles within your company with talented individuals, however more than the talent itself is the ability to hire well.
Step 2: Check for Market Opportunity
Just because your friends like the idea behind your startup doesn’t mean that it is going to impress a venture capitalist enough into providing you with seed funding. A venture capitalist is going to want a return on their investment of seed funding. This means that in the early stage of your company, you need to research to see if there is a real market for your product or business idea.
By presenting your market research to potential investors, they’ll be much more likely to impart their seed capital to you. You’ll also better understand your business plan and the steps you’ll need to take in the future.
Step 3: Do You Have An Idea?
No assessment of a market opportunity is complete without a concept and vision to match it. Once you’ve identified the market you are going to target, you need to make sure that you are raising funds for a startup with a real vision. Before any investor is going to give you any seed funding, they are going to want to see that you have big business plans.
The key to presenting a good plan to potential investors is to make sure that you mix your vision with a clear short-term plan. If you can show that you have a road map for growth, investors are more likely to trust you with seed capital.
Step 4: The Minimum Viable Product
One of the most important parts of how to raise money and have a successful fundraising event is to have something to sell! You don’t necessarily have to show your ideal product to investors when you’re looking for seed money. It is important, however, that before you go raising funds you can present something that you would feel comfortable selling to customers.
Step 5: Proof of Traction
The last thing you need to have ready to show before seed fundings are some proof of success. Before you’ve got your seed money you can’t be expected to be an instant unicorn. However, any financial documentation that shows that you know how to run a business will be very enticing to investors getting ready to give out seed money.
If you need help getting your finances in order before your next round of raising funds, you should consider getting some outsourced CFO consulting. If you have any questions about outsourced CFOs, or guidance on getting investors, don’t hesitate to contact us.