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Raising Capital - So it’s time to raise some money…
by Startacus Admin
Cally Russell of Malzee.com shares some of his top tips for getting your first investment...
There’s a point in most small businesses' journey where the founders realize that the mission they’ve set out on can’t be accomplished without significant capital and resources. It’s normally a low point and one that leads you to question what the next steps are. Well we hit this point at Mallzee.com 6 months ago and have just managed to take the next steps with the completion of our angel round of investment. It was a difficult path and one that at times we never thought was going to end. With this in mind I decided that we should share some of our top tips for getting your first investment.
Now I’ve only done this once so I’m not going pretend to be an expert on fundraising but this rookie's guide might help you along your way.
Don’t Start Too Early
Looking back I started 3 months too early with fundraising. Make sure you’re ready to take money within the next 3 months, if you’re not you’re just wasting your time and the investors.
Make a Killer Deck
Once you’re ready then make sure you have a killer deck. Make sure you don’t overload it with information though – everyone hates death by PowerPoint. A couple of lines of information on each slide MAX. Also don’t just throw something together in PowerPoint. Find a designer and get them to make it look stunning, unattractive slides won’t help you or your business.
Build Your Network
You’re going to have to speak to an awful lot of people if you’re going to raise an angel round of investment. Make sure you’re keeping track of connections and network your ass off.
Oh, and make sure you tap into your mentors' networks and get warm introductions to people that wouldn’t take your call normally.
Find A Lead Investor
And find them quick. Most investors want to know who else is backing you; it helps them justify their decisions. Find a lead investor who is willing to put their name to you and you’re well on your way.
It Takes Time
As Mark Suster says “Investors don’t invest in dots, they invest in lines.” The chance of someone meeting you once and deciding they want to invest is slim. They’ll want to see that you’re making progress. If you manage to have the money in your account within 6 months of deciding you’re going to try and raise then you’ve done a very good job.
Learn Your Stuff
Raising investment is complicated. There are more terms than you could imagine so before you set off down this path spend some time reading. I would suggest Dermot Berkery’s book, Raising Venture Capital for the Serious Entrepreneur.
It’ll get you up to speed and also save you some money in lawyers fees once you have investors lined up.
Beware of Sharks
You need the money but make sure you don’t end up in bed with a shark. Don’t be afraid to say no to investors that you don’t think will benefit the business. If they thought you were worth investing in, so will others.
And the most important piece of advice – never give up. This is likely to be the most difficult thing you’ll do in the early stages of your business so be prepared to get knocked back a lot and never give up.
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