It is important to understand that fundraising is difficult. This is difficult because you already have a (very) full time job as a fast growing business. Layering on top of this to go to the market for money and you very quickly find yourself doing two full-time jobs in the same 24 hours.
No single fundraising process is the same, whether from an investor or company point of view – founders often wonder how their fundraising experiences are for each other and even at different times in their own company Are different. There is a seemingly endless list of potential travel hazards on the road from fundraising to a customer crisis for a poorly placed VC or 2 and much more in between. We have told about some tips and tricks that we hope will help you to raise money for success.
1. For the busiest part of the process, try to choose the quietest window in your company’s calendar
The £ 2-10m fund “usually” takes 3–6 months to execute – and we usually use the term very judiciously – and perhaps another 3-6 months to plan , So it may take up to a full year from the end. . But there is no continuous workload here. In our experience the most intensive part of the process for founders is the first pitch meetings until they come to a close.
We say this because before that, you are usually the one in control of the timetable. Once your first pitch meetings are over, you suddenly have parties involved on the other side, who make follow-up (hopefully smarter) requests for analysis, timing, and information. Therefore, if you have flexibility, try and plan your first pitches at the beginning of a quieter or more stable time in the business cycle.
2. Wherever possible give yourself some breathing room by advancing your team before starting the process
Maybe take a little bit earlier than what you had planned, or hire your team some opportunities after which they “step up” – they will be good for you and you. But seriously don’t leave the business just to get cash in the door, so many businesses look at decreasing performance during the performance or just post a process and it’s really unhealthy! From a value standpoint, even 6 extra months of that rental salary can help you perform better during fundraising and maximize your chances of pre-funding evaluation and completion.
3. Get Organized!
Talk to your existing investors, they can help you from all the bottom and they will have a wealth of experience to pass on as to how to manage the process – not to mention the fact that they are doing well Can be
Be eager to participate. Create a financial model that you are happy with. Build a deck that explains why this is a great investment. Choose a lawyer to work with – you will need them to help you, and good people will understand the enterprise space and also be a font of knowledge on non-legal subjects.
4. If you need a corporate finance advisor, decide
Generally, the less goals you have for a mentor requirement. Below Series C you don’t “need” and picking one bad will make the process less smooth and certainly more expensive.
If you really shed light on the resources (and / or experience) to grow a series A or B, then think of an advisor to help you before you go out of the market. Ultimately VC is the business of the people – we are investing as your founder, so we need to know the business through you and not a broker, so whatever you do will work with you to make sure that they Do not get in the middle of a relationship!
5. Work on what type of investor you are raising money from
We believe that at this time you are taking a round that may be larger than your current angels and that it probably controls crowdfunding on its own, unless you already have a significant community. Crowdfunding is often preferable for D2C businesses where consumers can be personally excited to support a company.
This probably leaves VC (your bog-standard venture capital firm with institutional investors); CVC (Corporate Venture Capital: Like VC but investor is a corporate) or a family office. As well as deep financial pockets a top-flight partner brings many non-financial benefits from hands-on support, for a mentor to leverage an important network for you.
The gold standard is a backer with a long-term view (and money to match), a great reputation (firm and personal), who knows your field / business model well, who is located close to you, up their sleeve. Ready to roll. Help when you want and have a big ambition to match you. Remember this is a wedding, not a speed date!
6. Try not to talk to them all – Focus will be a great marker of success
The chancellor in London has a lot of blessings but from a founding time management perspective it can be a nightmare! Before you contact any contact try to make a long list of all the funds that will give a business of your type (revenue, location, region) that you want to raise. Historically, making this list can be quite a task in itself, taking time, favor and coffee to map the network. Today there are many great tools that you can use to quickly filter which funds you need. Suggested tools include databases such as Beauhurst or Crunchbase.
We have pulled together three lists showing the thirty most active funds in the UK over the last two years, but you have to check it out See the full guide here To access the lists.
Even if these deals are within our parameters, that may sound a bit strange, even if you haven’t included Smedvig in the £ 2-5m list! But as we only want to invest in 2-3 new businesses in a year, becoming a long-term subsidiary partner in our portfolio, this result only means that the companies we invested in this period raised a little more capital. Were staying.
Prioritize this list based on the following factors:
- Most importantly, good or bad things about the fund and partner you have worked with.
- Do they currently have money? There is nothing worse than pitching for a zombie fund!
- Stylistically are they interested in rolling up their sleeves and helping you when you need them?
- Have they invested a lot in businesses with your business model? (Eg B2B mother-in-law?)
- Have they invested more in your sector?
Then choose the top 5-10 from it. We will not proceed beyond this number until you start receiving negative feedback from early access boycotts. Focus on making the conversation high quality rather than high volume – manage it in the same way that you manage your sales funnel.