You don’t always ask the right questions when fundraising.
Instead of focusing on “How”, you focus on “When” and fail to secure any funds.
Who wrote this?
Whether you are fundraising for a fund or a startup, you need to first create the right documentation for investors to read.
The legal blunder which is entailed in fundraising must be fixed to ensure investors would even consider your business a viable investment.
Your documentation should be intact when approaching investors and especially when you get on a call with them.
Your numbers don’t need to look amazing, but they should add up.
If you claim you have secured an X amount of money in debt or a certain amount of revenue in a given year, it should be on paper.
One mistake could be the difference between a follow-up conversation and the “we have secured all our funding for this cohort” response.
No one has taken interest in your business
Some investors avoid the world of crypto or other verticals (such as Cannabis) altogether.
The prevalence of scams and the fact that the numbers don’t always add up when the idea is pitched to them scares them away.
The main issue though is the fact that you don’t always bother to ask the right questions.
You don’t focus on the “How” of getting funded.
You focus on the “When” and are surprised when you hear “NO” over and over again.
Focus on costs and revenue – where is the break-even point?
Guarantee the product is going to be amazing; show your work.
Ensure you’ve hired the right people for the job.
Don’t look at the bottom line instead of understanding your goal: “How do I, as an entrepreneur, secure funding?”
If needs be, hire outside professional help.
Get an experienced mentor on board.
Shop for good financial auditing.
I think it’s good
A couple of years back, Chef Gordon Ramsay ran “Kitchen Nightmares”, where he combed the US (and the UK) for failing restaurants to understand why it was so.
Most of the time, the food (in your case: the product) was bad or unpresentable but the owner (you) was in denial and said: “I think it’s good”.
Sometimes it was the way they ran the kitchen, the pantry and their staff (in your case: bad management, bad process) which failed to secure revenue (in your case: funding).
We get entrepreneurs in who tried securing funds before.
Either via traditional means or via new age fundraising, such as an ICO, IEO, STO, etc.
Needless to say, the fundraiser had failed.
Instead of trying to ask the right questions, they focus on “When” they might get invested.
When we explain what needs to be done before that, we get the same response over and over again: “it’s good as it is, no need to change anything”.
Apparently, it isn’t, so why do you bother saying otherwise?
Same goes for the overall structure and when explained there is work to be done, they always focus on the costs of it all and not on the end goal: getting funded.
Before going for a fundraiser, you need:
- A good pitch deck
- Numbers that add up
- Relevant team members
- An ask which fits your current state
- Relevant offering for the investors
Without the above, no successful fundraiser will be happening anytime soon.