Think your start-up is ready to get into the fundraising game? Here are the three simple steps to capital raising success (and some questions you need to ask yourself).
All the answers to your unique business lifestage questions
There is raising capital and there is staying where you are. The first requires that you start asking yourself some pretty serious questions around your plans, growth and future.
The second leaves you in charge of your destiny, as much as it can be without the kick of capital investment. Neither choice is wrong, there is only the choice that’s right for you and your future plans.
Ask yourself these three questions and answering them honestly:
- Can you handle the responsibility of fiduciary to investors, employees, vendors and customers?
- Can you remain ethically and morally sound?
- Can you ensure that you are prepared for legal and psychological challenges?
Nothing goes to plan, things always take longer than they should and there is a weight of emotional and physical responsibility that you have to carry as the owner of the business. If your answers to these questions is an honest and prepared YES, then you are ready for step two.
The next set of questions you have to prepare for are more immersed in the culture you are planning to create around your business, and the relationships you are building with your investors.
Related: Do you need a business coach?
You want to build a business with long-term legs and the only way to do that is to build a business that has a strong culture of respect and innovation. Ready?
- Can you be transparent? Can you share information openly with investor and employee alike? If not, why not?
- Are you attentive and responsive? If investors give you money, you need to always respond to their queries and meet their requirements. It doesn’t matter how many things you need to do, this is important.
- Can you always treat people with respect?
Finally, you need to tick the boxes of accountability:
- Can you be accountable for mistakes in judgement?
- Are you prepared to take responsibility for any errors in your decision-making?
- Are you prepared to talk about how and why something happened, how it went wrong and ways in which you are going to fix it?
Before you engage with investors, it is critical that you understand the responsibilities you are taking on and are aware of how you need to approach them. Don’t make the mistake of approaching investors unless you can demonstrate that you meet their criteria.
Related: How to secure your start-up on a shoestring