10 Things I Wish I’d Known Before I Tried Fundraising

#1 – Early, In-Depth Market Research is Essential

As a founder, the business idea you have can be all-encompassing. You are totally convinced that the product or service you intend to bring to market can and should be a success. This leads many to understate the importance of such things as the competition out there, what sector(s) they should focus on, and having a clear understanding of their target market demographics.

Take time to look at the origins of these companies, how long they functioned on bootstrapped funds, and any fundraising paths they have taken to successfully secure the funds they were after. This will be valuable time spent because it will help founders understand their company’s viability without having to part with any upfront cash investment.

It is also crucial to understand the industry sector you will be getting into and the current market forces in play. By doing this you should also get a clear insight into the type of customers you will be targeting. Take time to understand their behaviors, pain points, and what spurs their decision-making process.

#2 – Real Focus / Keep Things Simple

It is a natural tendency for entrepreneurs to try and do far too much all at once. The reason here is because there is so much to do!

While it may not be easy, founders would be wise to take a step back to appraise and prioritize their goals. Doing so will allow you to focus on what will effectively get your startup off the ground. This focus should be on a niche that will get things growing.

Of course, the bigger picture can always be in mind but leave that simmering. Start working on the part of your product or service that will initially establish your business. Once that is started you can grow and add to those products or services in a priority manner.

To explain further, many founders feel they need to offer their customers a wide choice of products or services from the get-go. Doing that can lead to decision-making delays. In simple terms – Start Small – Grow Big!

#3 – Bootstrap for as Long as Possible

This point may be contrary to the popular opinion that many founders have. They feel the need to raise outside funding early in their startup journey. The fact here is, that raising money means you are diluting valuable control of your business.

This obviously depends upon your personal financial situation and the product or service you are intending to build. However, if it is at all possible, use your savings, and lean on family members and any benefactors. Doing so will allow you to take as much of a self-funding and DIY approach as possible. 

Look at effective ways to keep costs down.There will come a time when you need to raise funds to ensure healthy and structured growth but that should be done by keeping as tight an initial rein on cost as possible.

#4 – Place a Strong Emphasis on all Agreements Struck

Founders will spend a lot of time in discussions and negotiations with a variety of people. Prime examples here will be with partners, employees and investors.

Trust is a two-way street and it is essential to build and nurture relationships. However, when it comes to agreements these must be formalized. This is because things agreed through the spoken word can easily become misconstrued as your business develops and time goes by. Putting all agreements down in legal terms and ensuring the parties concerned sign the documents leaves no room for ambiguity.

What is agreed, written up, and then signed by the relevant people will avoid any future disputes. In this respect, founders should think very carefully before making such agreements and be fully aware of what the expected outcome of each agreement is.

This can be effectively achieved by seeking the assistance of a company that has long experience in the startup arena. One such company will be mentioned in the conclusion below with reasons why such an approach makes real sense.

#5 – Thoroughly Screen Your New Hires

The quality of key personnel hired to establish and help grow your new business cannot be underestimated. The fact here is that these staff members can make or break your chances of success.

This means that founders should be clear on exactly what is needed in the priority positions to be filled. When discussing an individual’s specialism, go in-depth into their qualifications through reference-checking. Also, ask them to describe in their own words their achievements to date and why they feel they are a good fit for the company you are building.

While such experience is essential you also need to judge whether that person is a team player. They need to be willing to assist (and be assisted) when necessary by you and other employees. These attributes cannot be underestimated.

As a founder, you will find yourself wearing many hats as your company begins its journey. By necessity, your business will be a tight ship so all of those onboard need to pull together.

#6 – Secure Intellectual Property Rights Early

This is likely to be something that entrepreneurs do not necessarily consider in the beginning. However, protection is crucial. Securing copyrights and any trademarks should be completed in the early stages of your company’s foundation.

These intellectual property rights will help protect your product, service, or the brand you are establishing. It is also important to realize that the importance of such protection will increase as your company establishes itself.

There are two major reasons for this. First, such protection will prevent competitors from encroaching upon your space and original idea. Second, investors will also want a clear understanding of the intellectual property rights status relating to your business.

Get things settled early and as any additional rights are required, secure them as necessary.

#7 – Putting Yourself out There is a Must

This does not apply to those founders who are full of self-promotional abilities and are outgoing as well as confident when presenting to individuals or groups of people. But it is a fact of life that many are not this way inclined.

The point here is that your product or service is very unlikely to take off unless you determine to put yourself out there. As a founder, you are your greatest and most enthusiastic supporter. This needs expanding on.

It is a fact that word of mouth certainly helps as does being in the right place at the right time but in the vast majority of cases that is not enough. It is down to you to make a convincing case for yourself and your product.

During the very early stages of your startup, you will be the face of the brand. If you intend to use social media apps to make videos and promotional pitches, get practicing. Be ready to get involved in podcasts. These things may not come naturally but they will get easier over time.

#8 – VCs Lean Towards Certain Startup Types

There is no doubt that VCs (Venture Capitalists) are more amenable to funding startups in certain industries and product sets. This means you need to understand just how easy (or difficult) raising funds will be depending upon the type of startup you are building.

Are you a product-idea person who is determined to push on with your concept regardless of whether it excites the majority of VCs or not? Or, is it your intention to look at the VC market, understand the type of service or product that most attracts them and develop your startup around that?

If you are going for a niche market you should be mindful that VC firms often have very tight quotas on the number of companies they are willing to put money into within that niche. That can make your fundraising efforts far more challenging and longer to secure but it is still possible.

#9 – Business World Experience Will Stand you in Good Stead

There is no doubt that becoming a founder of your own business is the ultimate dream for many. However, unless you are 110% set on starting your own business by the time you reach the age of 20 then getting some real-world business experience under your belt will not harm at all.

Finding a job and getting involved in how a business runs will stand you in good stead for the time you decide to step out on your own. The experience gained from working in different organizations can be invaluable. It will also give you an idea of the different elements of business that go to make up the whole.

It will also allow you to take the ideas you feel work well and then develop your individual approach. Consider the things you would do to improve the running of that business. Experience cannot be brought, it is self-taught.

The other advantage here is from a financial point of view. Being able to save money from your salary will allow you to have a decent amount of cash to bootstrap during the early stages of setting up your company.