Startup

Posted 04 May 2020, Editor's Desk

5 Tips for an Early Stage Fundraising from a Venture Capitalist



Early Stage Funding to Sale your Business


Early-stage fundraising is looking at for high potential and growth companies. You should have a clear sense of your vision and a passion and be able to convey that to investors. To help eliminate some of the myths and shed light on what goes on when pitching the VC investors, here are a few tips to practice that can help you in this process:-


1. Offer a solution to a problem. 


  • Firstly, you need to find a solution to the problem that can impact a large number of people to entice a venture capitalist for an early stage fundraising.
  • After the problem has been identified, the investors always look for the solution so make sure that solution is clear, to the point and here to stay. 
  • Now you have to show your investor how your company and product will address the problem.
  • Most of the entrepreneurs concentrate on the product when instead they need to focus on their customers and the burning problem the customer is facing.
  • Try to use stories and pictures when you explain the execution process.
  • Explain your product and services very clearly to avoid any kind of confusion.



2. Revenue Model


  • Now that you have already explained your product/service, you then have to explain about how fast you company is growing and what are the revenue projections you expect during your pitch for an early stage fundraising.
  • You have to discuss how your pricing will fit into the market you are addressing.
  • The investor is always interested to know how you will undercut the existing solution with your pricing and will your customer be ready to pay that price?



3. Milestones


  • Investors like to spend more time at this point.
  • It talk about the growth seen by your company over the last year and what will be the projected growth in the next  3-5 years looking at the finances and business model.
  • Your operations plan can also be shared in this slide which can include distribution channels being used, operational structure and the big plan to make money in the future.
  • No one can predict where you will be in the next 3 years but the investors would like to see your future plans and the financial knowledge to reach there.
  • Do share your profit and loss statement for the last and the next 3 years. Giving your investors a clear picture will lead to early stage fundraising.



4. Target Market


  • Make a list of data of your ideal customers and how you will position your product in the market.
  • This is where you tell the story about the scale of the problem you are trying to solve and the scope of getting success.
  • Always remember that the more specific you are with your targets, the more realistic your pitch will be to get the early stage fundraising.
  • Your market will decide whether you are able to get the funds or not because if you are operating in a small market then the investors might find the ROI small and therefor consider it risky to fund.



5. Actively ask for feedback


  • Touch base with the investors after the meeting and actively ask for feedback.
  • The information you receive can help you refine your pitch.
  • Do not make changes based on every single piece of input. Only adopt what you think is the most important feedback for your company.



Entrepreneurship is one of the greatest experiences in the world. If you are choosing an investor make sure your dream & vision of the company remains intact despite taking money from someone. So choose the right investor and work towards getting early stage fundraising.


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