Startup Funding-Getting Angels to Like You!

This is the typical scenario for most new startups: You have no track record, no customers. No proof at all yet that your brilliant idea will work, can work or will stand the test of time. You do not get past negotiation for funds because you do not have solid historical and operational performance. This list of reasons you are still not funded is endless. Raising funds for your startup could take time, you  should have options for sustaining your business without investor funding.

Angel investors and venture capital firms typically want to see numbers that shoot up like a hockey stick. But don’t get it twisted they want proof, data and facts to back your hockey stick. And you better be good at presenting those numbers. If you fall short of that, you have to put in an extra effort to convince them that your business is worth their money. Whilst you are presenting to investors make sure you keep improving your product.

Raising money is simple and complicated. It could take a few weeks and could last a whole year. If you are a new business focus  on the one thing your business does really well. If it’s a simple feature that can solve a problem quicker and easier, make sure you have completely nailed it. Of course you will iterate and and build upon it along the way. You are better of with a prototype. Spend time to create a great prototype. Test your prototype and seek feedback. Make sure your product makes sense to your prospective customers. To approach an investor, spend some time on your prototype and make it functional.

The greatest challenge is getting real customers. It’s a make or break at this time. Try everything humanly possible to get noticed-Facebook, Twitter, events, email, blogging, contact bloggers, whitepapers, slides, free courses, webinars, press releases, guest posting etc. You are better off with real customers when approaching investors for funding. Create your pitch, make a list of potential investors or startup accelerators-let the pitch begin.

Do your homework, find angels or VCs  that focus on the kind of business you are building. Startup investors get hit on more than you can imagine– everybody wants a piece of the pie–so they filter aggressively. You must convince them of three basic things: Your idea is something the market wants and ready for it, you can make money now or in the near future and you have the ability and commitment and passion to make it successful.

Focus specifically on why and how your product or service is different. There may be a few others doing exactly what you are doing. But you may have identified something different. The investor should know about it. If you don’t have competition, you probably don’t have a market to sell into either.

If you haven’t done this before-pitching for startup capital, don’t start with your best prospects, start with your worst so you can learn from them. And be prepared for  a thousand no’s, you only need one yes. Don’t get rejected because of lack of knowledge or preparation. You should know your financials, your strategic goals, your product, market, sales numbers, how you intend to make money etc.

There’s no point in launching a business that will eventually sink under the weight of your investors’ demands. Play by the investor’s rules to get them to open their checkbook, but protect yourself in the process. You can also consider other funding options if you not getting them to like you!!