Preparing to fundraise

Preparing to fundraise
Preparing to fundraise

Venture funding is best suited for ultra-high growth businesses in huge markets.

It is closely linked to the early days of some of the most iconic tech companies globally, including Apple, Microsoft, and Meta (Facebook), and some of the newer companies demanding our attention.

A handful of category-defining technology businesses have been able to grow through profits (see Mailchimp), but the reality is that to hit scale, most do it through venture funding.

Venture funding is by no means the only source of funding, but if you have decided to pursue it, here are a few thoughts about how you might prepare with an idea validated.

Build an all-star team

A core team needs both the insight and the skill to build the product they say they will. If your product is heavy on operations, make sure someone covers that skill set.

If your technology is relatively simple, it might be less critical for founders to be technical.

Map out your core competencies, and between the founding team, make sure you’ve covered the significant buckets.

Develop your fundraising collateral

Most people go from idea to research to pitch deck. I prefer to go from idea to research to memo to the deck.

This middle step of a ‘memo’ is essentially a deck in word form.

This serves multiple purposes, but most importantly, it allows you to get your content together without thinking about how exactly it’s presented.

When you go to the last step, you’re more concerned about communication than content.

It would help if you also did some high-level financial modeling on spending and revenue drivers, but the earlier stage and the less concrete your business model, the less important this will be.

Start conversations

Before directly pitching investors, start building relationships with the relevant stakeholders.

Always ask if you know or can get warm intros to these conversations, but cold reach out can also be highly effective.

I find that other founders and angels can be an excellent place to start. While analysts and associates at funds might be more willing to jam on ideas than press you for a pitch.

They can also act as strong advocates for you when you’re ready to pitch through the internal process.

Effectively preparing to pitch can take a process from good to great and beyond!

Original post. Reposted with permission.

Recovering strategy consultant writing about tech and venture across emerging markets – especially Pakistan.
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