Chapter Four - your funding roadmap: How to find and reach the people who can help you
by marufjony · 30 things on Twos
- Fundraising is not meant to boost your ego
- You are likely to get dozens of nos before one yes
- How to make fundraising efficient and effective as possible
- If the infusion of capital will be used to grow the company, then the equity distribution is worth it.
- Set your funding goals
- What you want to do next to make your business grow?
- How long you think it will take to do those things?
- How much money it will take to reach those goals?
- Are there key hires you need to make?
- Hire a marketing firm to reach more users or prove there is a significant market to utilize our product
- Set your goals for the next 12-18 months and put in timelines for the specific milestones
- Calculate how much money we will need to reach those milestones
- Augment those numbers by 10-40% to cover unexpected costs
- This will be the starting request for how much capital we want to raise
- Asking for a specific amount linked to specific milestones will make us seem like a more credible risk instead of asking for a round sum
- Investors will be able to see your progress and gauge the funding you need.
- Provide a range of investment
- ‘This is what I need’ or ‘this is what I can accomplish with this dollar figure’
- Create multiple funding plans
- Now you need to determine how much equity you are willing to let go of for that investment
- Valuation is an art, not a science.
- Compare the company to similar companies in our region
- Use a cap table to calculate the pre-money price per share
- Don’t run the risk of a down round
- Losing valuation in future rounds of funding
- A relatively accurate valuation will serve the company better in the long run
- I like the entrepreneurs to give the first offer in equity
- Start targeting your ideal investors
- We are founders take money to grow faster
- Create and follow your funding roadmap