Startup Founder? Ask these Questions Before Seeking for Funding

All appears to be set, for your startup, except for that, seemingly, important part, which is your source of fund.

Looking to raise millions, in seed funding, an average start-up founder would look no further, than the direction of an angel investor, or, a venture capitalist.

Before moving ahead on such, however, take a pause and demand from yourself, “do I need to obtain this funding?”

Have you thought of not being ready, to use funds that you are not, mentally, prepared for?

An unnecessary pressure can be on you, when the fund is secured, at the wrong time.

On the other hand, if you made a choice, to go for it, remember that, you might be “forced”, to give up a part of your start-up.

I have come up, with some questions, worth asking by a startup founder, before making that decision to go for your startup funding:

Is External Funding Really Required?

As much as a startup founder seek funding for their venture, they should realise that it is not free.

In considering external funding, founders, or, entrepreneurs, ought to weigh their options.

You may have to give up a large chunk, of your profit and unwanted pressure, from your investor, to deliver results.

This pressure may force you to take on certain obligations, for your investors that you are not prepared for.

Also read, Is VC Funding the best for your startup

How Much Am I Willing To Give Up?

Accepting external funding means that, you are giving up, part of your organisation, out for money.

Have you considered, what you will give up, in terms of control?

Remember that, when you get funded, investors come on board and they will, definitely, have inputs, as to how operations are executed, in your organisation.

Also, think of what the actual value will be, of the returns, for any fund raised.

For instance, if you give up 30% of your company, would the return on it, be worth, over what 30% profit would have returned?

Who Is My Ideal Investor?

Beyond raising funds for your start-up, investors can offer you, more than that money that you seek.

At different rounds of fund-raising, you have to define the type of investor you require.

What do you need from them? A Silicon Valley-based investor, might not be the right person for you, considering the market you want to break into.

Ensure that, your vision, mission and core values, are aligned, to what your ideal investor might turn out to be.
Is My Business Worth The Investment?

Put yourself, in the shoes of an investor and see, if you will, actually, commit a huge amount of fund into your start-up.

If your answer is no, then, think of what you can do, to make it worth investing in.

What would attract an investor, to throw in his hard-earned money, without thinking twice?

Consider certain things that you may have to change. Check out some parts, of your services that need improvement.

How Prepared Am I To Answer Questions?

Are you ready to be under the fire, when you stand before investors?

You can deliver a great pitch presentation, but it is another ball game to, accurately, answer questions thrown at you.

Beyond your pitch deck displayed on a PowerPoint presentation, you should have facts, figures and trends, on your industry, right there in your memory.

What Do Investors Expect At The Fund-raising Stage?

For every round of seed funding, the expectations of investors, are quite different.

At the round of pre-seed funding, you might be able to play the emotional card, with your passionate sales presentation.

But moving beyond that stage, if you cannot demonstrate metrics, like revenue, customer acquisition and retention, then, you are not, up to the task.

Ultimately there are lots of questions a startup founder can ask but the ones discussed here are very essential for their funding journey.

Also, read, Why Focus On Raising Startup Funds, When You Can Do This

Featured Image: the1thing

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