How To Get Funding For Your Startup Idea?

get funding for your startup idea

Raising funds for a startup idea is the challenging task that all the startup founders have to surpass. With an idea in your mind and dedication to turn it into a success, it is not easy to allure investors to invest in your startup idea. The biggest barrier to securing investment for the startup is the lack of understanding the importance of investors concern. Most people aim to express their great idea to prospective investors to impress them and attract investment while in reality, investors seek much more than just a great idea.

If you are also curious to know what are all those things that investors look for prior to betting their money on an idea, then you have landed on the right post.

1Meeting Investors

The first step to secure capital for your startup idea is to meet your prospective or targeted investors. Go to fundraising events and speak to the investors. Share your smart idea with them. Demonstrate passion and be confident. You need to grab their attention so that they will allow you another opportunity to present your unique idea to them with detailed information.

2Presentation

Delivering the best presentation is your best option to attract the attention of the investors to your startup idea. The clearer you express your idea, your plan, business model etc, the earlier you will impress them and will be able to get funds for your startup idea. You have to make them believe through your presentation that you have the requisite knowledge in the area you are entering the market.

Your aim should be to assure the investors that you possess the relevant knowledge and have done enough of research of the trends, opportunities, problems etc to finalize your idea into a perfect plan and bring huge returns and success to your business.

Your presentation should cover the following major aspects:

Company overview

Name of the company, location, and other relevant details will be covered here.Make sure that you have mentioned every important aspect of your company.Whether it is Sharing the reasons for choosing a particular location of the principal place of your business or highlighting the nature of your business, nothing relevant should be left undiscussed.

The team

Give details of the founders, key advisors. Highlight the strengths of the team along with special achievements if any or relevant experience.

Market Opportunities

Convince that you have large and growing opportunities in the market because Investors are ready to invest only when they realize that your business has compelling product and services that will expand the market opportunities for your business.

Your product or service

Show your product or services that you aim to deliver.Show how your product or service is unique and different from others. Also, explain itsutilityy and special features that will fulfill the need of your customers.

Your customers

Who will be your targeted customers and how will you reach to your customers. Do not forget to mention the cost of customer acquisition.

Competition

It is impossible to have no competition even if your product or service is entirely unique. If you feel you have no competition then it means you have not done a thorough research on the market. Wait until you have found your competition and mention how your product or services are different from other competitive product or services.

Business Model

Demonstrate how will you generate revenues, your pricing strategies etc. Here you need to be very specific about the pricing of your products.

Strategies for growth

Show all the strategies that you will be following for the growth of your business and capturing more market share.

Financial

Your projected revenues or expenses. How much money you are seeking and where and how those funds will be used.

Make sure you have tailored your presentation as per your audience and you have also worked on your presentation skills.If you are serious to raise funds for your startup idea then you have got to exhibit your seriousness towards your idea through your best presentation and put your best foot forward to open the doors for funds from various avenues.

3Right team

Your prospective investors are for sure going to evaluate your team to ascertain the chances of success of your startup. Therefore, the team should be experienced and have knowledge of the industry. Be careful who you hire. Talking of knowledge, your board should have a perfect mix of varied skills ranging from marketing or leadership skills to other business skills. It must share a common vision and should be passionate to bring success to the startup idea.

Further, investors also want to see the capability of the board to work and learn things or their adaptability to changes as corporate world is full of uncertainty and entrepreneurs are bound to face changes in the industry. It is, therefore, very much essential that you have considered all these things and qualities that you need to seek in co-founders/ensure prior to approaching investors and pitching your startup idea.

4Business Plan

You should not even think of raising money from external sources without a proper business plan. A formal business plan will exhibit your seriousness towards your idea or business. In fact, it not only assists in alluring funders but also help the founder understand the market, competition, customers or assess the financial needs and feasibility of the business and much more. So, creating a business plan should never be overlooked as it is going to be beneficial before the business is live as well as later at every stage of the business.

Let us take a look at the major components covered in a clear business plan:

Executive summary

Aim to make it stand out. Come straight to the point and introduce your business idea. Discuss the need or the opportunities, your targeted market, business model, marketing or sales strategies, competition, your competitive advantage, financial projections and Financing requirements. In short, the executive summary should alone enable the investors to take a decision whether to invest in your startup or not.

Description of your business

Describe the type of business, location, legal structure and other key information along with the goals and the customers you intend to serve. Mention how your products or services will be beneficial for the targeted customers and how your business sets you apart from the competition in the industry.

Market analysis

In this section, you have to demonstrate that you know your market well. Explain the industry, challenges and growth prospects of the industry, your target market, your ideal customers, size of your targeted market, how will you reach to your customers etc. You will also have to share the information or results you gained on conducting market research, your competition, and other obstacles. At the end, you have to convince that your products or services will uniquely meet the needs of the targeted market.

Strategies (sales or promotional)

Explain all the strategies that you would be implementing to advertise or promote your products or services and get them to the market.

Fund requirement

Here, you can talk about the money you need. Also, talk how you will utilize that money.

Financial projections

This section demands the need for Income statement, Balance sheet, and cash flow statement. In general financial projections should be made for a period of three years. It is difficult to project for future but is possible with market research or considering the expenses or sales of any similar business.

Always double check your business plan to ensure that all the important aspects have been covered and no important information is missing.

Do not rush

Approaching customers with little research and less knowledge of your idea and your potential to grow can cost you heavily. Last advice to increase the avenues for your funds is to keep the patience and do a thorough research of the industry, market trends, market opportunities, problem you are seeking to solve with your product or service, customers, competition and the list goes on. Bottom line is there should be nothing you are not prepared in advance to deal with.

Conclusion

Funds paucity is one of the major reasons for the failure of the most of the startups. Investors, on the other hand, have higher benchmarks to ensure the due returns on their money invested in the startups. Going an extra mile at every stage of raising funds for your business idea will ultimately help you to demonstrate and ensure the investors that they are investing in a promising startup idea that will maximize the returns.

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