Get funded

Now after knowing almost everything about a successful pitch deck, you need to know about how to get funded to bring your business vision to life. After doing solid research and generating big ideas, and presenting them all in your pitch deck, you should be well aware of the suitable funding sources for your type of business. We have discussed them here.

There are five primary funding sources:

Self-Funded You can maintain complete ownership of your businesses and don’t have to accommodate others in the decision-making process. It is the cheapest way to finance your venture among all the others. Only thing is that you might miss out on the networking opportunities and expert advice. Funds here typically come from re-invested profits where founders sell other services and invest that money earned into the business.

Friends and family In order to support you, your friends and family most likely will invest in your venture, but you should clarify beforehand that they will be buying equity in your company. Ensure they understand all the risks involved. They probably won’t get their money back as most startups fail. To raise relatively small amounts for the initial stage investments from friends and family is the best option.

Crowdfunding This funding method grows in popularity with five-figure campaigns becoming more and more common among all those who are looking to raise seed capital. All founders must choose whether to sell equity or reward backers with perks such as discounted products or early delivery as no one wants something for nothing. If campaigns meet their pledge goal then only they get funded. There is a high failure

Funding Sources

rate, but there are additional benefits to running a campaign as well. These benefits can be used to increase pre-sales, market a product, and test pricing for those that are successful.

Accelerators Accelerators offer a gateway to funding. These closed groups provide selected startups access to a network of investors, suppliers, vendors, mentors, and other useful contacts. They also supply advice and educational services to help you in refining your business model. Typically, approved startups give up equity in exchange for getting access to an accelerator’s network. It is important to research accelerator groups thoroughly when applying to them. Many are a lot better than others, and many are also industry-specific.

Angel investors Angel investors are small trusts or wealthy individuals who are personally ready to invest in your venture. They can provide valuable advice and industry contacts and seed funding as they are often successful entrepreneurs. In exchange for future profits an angel investor will buy equity in your company, but they often take interest in business operations as well unlike the other financing methods. So it becomes, important to research angels before you decide to approach them. Make sure they have a good reputation, as well as the skills and contacts that will help your business grow.

Venture capitals (VCs) Venture capitals provide seed funds just like angel investors in exchange for equity. Venture capitals have the resources to invest millions of dollars in your business unlike angels, who typically commit relatively small sums. They pool money from pension funds, institutional investors, and insurance companies and invest in high-risk enterprises. They are expected to deliver their clients very high returns because of the high-risk nature of their investments. Thus, they also often take an active role in the company’s direction and prioritize revenue over the company’s original vision in which they are investing. Including its current needs and long-term objectives, start-up founders will have to consider which investor is best suited to their venture.

Approaching The Investors

Investors recognize the tenacity of an idea and how it may turn out to be profitable for them. Investors provide solid financial backing and ensure that you focus on the product rather than worrying about the financial nitty-gritty. However, these investors are hard to come by.

Here we have shared what all will help you in approaching your investors confidently:

Accelerators:

• Find information on their website about the accelerator application process or by directly approaching them. • Research their network and their work with other startups. • After finding the right program, follow their instructions for joining.

Don’t forget to make sure that your venture meets the program specifications before submitting to it.

Angel Investors:

• Personal introductions work the best to approach them. • You can also use LinkedIn and your networks to find a common connection who is willing to endorse you. • You can use conferences and industry events if you don’t have someone to seek an introduction. • If all the above fails, then straight away pick up the phone and try to arrange a meeting.

Venture Capitals:

• Again, personal introductions will also work best here. • Startups regularly approach these companies, so when you get an introduction, be ready to move quickly. • The same day you exchange your business cards send the reading deck and never get into a presentation pitch without all additional documentation ready with you.