How to get ready for startup fundraising?

There is no miracle methodology to collect funds. The best way to take the right decisions and meet the right people is obviously to be advised by a mentor, to join an incubation program or to subscribe to a coworking space.

If you are a young entrepreneur without connections yet, the following tips can be a timeline wich gives you the right resources according to the stage of your project.

There are 3 big steps in a startup's life before becoming a company, and each of them is conducive to a funding model.

Image source : StartupCommons.org

1) Seed stage: Project R&D / you need self-confidence

When you decide to launch your own business, you may think you have the best idea of the world but you'll have to convince people of your genius.

For beeing self-confident in front of experts you’ll meet, you must be the first investor of your own project. If you are not ready to take risks on your own project, why others would do it? Don’t find the pretext to say that you have no money, if you have an entrepreneur mindset, you should have put money left, even if if it’s not much, because your idea needs it to take shape.

To grow your own funds, find people who would like to join you as co-founder or associate.

If you just have an idea to work on, a little money and no network, you are not credible enough to ask for big funds, but you're certainly a trusted person, so ask some support via a Love Money Collect or a crowdfunding campaign. It's a good way to talk about your ambition and let your family, friends, teachers, colleagues, and other close people to show their support. That makes you credible for your future entrepreneurship approaches.

You can also participate in contests : at best you win a check, at worst, you meet nice people and raise tips to improve your project.

All the advices you will receive can help you to create your value proposition and let you think about the weft of your business plan by using a Business model canvas.

Finding money to get a startup is a hard work, to keep your motivation, take care of beeing surrounded by people you love and trust.

Lots of people don't go beyond the stage of the idea because they do not feel supported in their project and stand out.

• Own ressources
  Love money
  Crowdfunding
  Contest prices

2) Early stage: Launching / you need a Business Model

The more you work on your idea, the more you will have an objective vision of its potential.

You are in the phase where your project is transformed into something concrete. You must absolutely project yourself in the future of your product to define your next actions and justify with your first real investor the foundation of your future expenditure.

There are public funds for young entrepreneurs, find the right information thanks to the Chamber of Commerce of your region or your town hall.

To be well prepared, you must identify your potential competitors : observe their means of action and refine your vision.

Most important : build a community of Early Adopters by having networking time. Keep in touch thanks to social media or newsletter and listen to their needs.

A UX Design approach is essential, it's even the most important! With all these elements, you will be prepared to develop a business plan in order to support the speech to bankers and future investors.

There are Speed Meetings that allow entrepreneurs to present their project to potential investors, this is a good way to find out if your startup is getting the attention of investors.

• Crowdfunding
  Banks
  Public funds
  Meet investors

3) Later stage: Development / you need credibility

The big investors won't take financial risks if don' t believe in your project. You must therefore prepare your startup's KPI. The investors need it to see the evolutions of your product since it was launched.

When you have enough elements to prove the viability of your project over the long term, you would have an easier access to large type of investors.

A startup is a family, people who work in are attached to the company because it keeps evolving thanks to them. Employers are a part of its history as the pioneers of an expected success.

Asking to your best employees to become partners is a good way to value their work, enhance their commitment and create a corporate spirit.

Depending on your ambitions, you can also convince Business Angels networks to finance your development or connect with private equity firm to sell it out.

Find out regularly about the economic news of the startup ecosystem and make contact with investment funds that might be interested in your activity.

Also inquire about Corporate Venture interested in your business, in addition to funding, they have material and human resources that will be able to propel your ambitions.

It is important to have a network for sharing your needs. Because everyone knows someone, who knows someone, who knows someone, who could help one day.

• Angel investors 
  Venture capitalists 
  Corporate venture 
  Early employees

Conclusion : After the latter step, which proves that your project is so great that it has become a reference in its sector, you can stay in the capital of the company, live and sell it out, or to introduce it on the stock market. If you have enough funding to keep your product competitive, then you no longer a startup ... congratulation, you built a company.