“The main objective of fund-raising is to accelerate growth"

Where are you today and where do you want to be next?

How much is your business is spending today?

How much do you need to get where you want to be in next 15-18 months?

How much of your business are you willing to give away to get that funding?

If you don’t raise money, where will you be?

1. Why do we take money from external investors?

• Diversifying economic risks by involving more people. If you acquire shareholders you spread the chances of risk.

• Accelerating your growth should be the primary reason of why you want to raise money. Focusing on the growth of your business should be your key planning.

2. What do investors look for in a business before deciding whether to invest or not?

• Team

• Product market fit

• Market size

1. Once you have figured these out, you need to think about your fund-raising ask.

• How much you want from investors?

• What right and privilege will you give them?

2. How much do you need to raise? How much is too little or too much?

1. Risks of raising too little funds

• You may not be able to spend money for acceleration of growth

• You may not see the expected results

• Competition catches up

• You have to start fund-raising again and thus lose focus on building your business

1. Risks of raising too much

• You raise expectations of investors and if you fail to deliver, you stand to lose further investment, and (possibly) even the original investments

• If they don’t give more funding, you will have to raise at a lower valuation which will bring down the value of business and negatively impact your market image.

• The idle hand makes a poor decision. You take more aggressive chances and make wrong decisions.

5. How you are going to spend your money matters to investors

Investors don’t just want to throw around their money . They analyse 3 different major components of how you going to spend their money

• Your product roadmap is very important. Investors like to know where you will take your company’s technology next and it matters a lot in their investment decision.

• How much of your expenses are going to be over your revenues is also very important. Investors focus on the optimisation of cash flow.

• You need to point out where you are going to spend the money specifically. Marketing, advertising, product development, hiring, etc. budget needs to be specified over a period of time.

What does a perfect investor look like?

• Has experience in similar field

• Has time to guide you

• Can add value and strategise

1. How do you raise funds?

• Investor pitch.

1. What should be in the investor pitch?

• Dynamic team

• execution strategy

• what you will do and what you did so far

• market problem and solution

• market landscape

• roadmap