Have spent the past two plus months preparing various EF companies on fund raising. Thought I would just write down some thoughts here.
Fund raising is a sales process – build your funnel, contact, follow up. The works. **Do not take rejections personally. It’s not end of the world. Move on.
Ideal time to raise your angel / outside money – when you have 1-2K MRR or monthly revenue. Strangers seldom invest in ideas. You got to show traction and market validations. Investors invest in businesses; not ideas.
Have a business brief for quick intro – ideally one pager, to quickly explain what your business is about and why YOU (your team) is the right team to execute and win in your space. This is good for cold emailing.
Have a GOOD investment deck that demonstrates your deliberations and conclusions/plans about your business to-date and for the next 18-24 months. It’s ok to not have a perfect pricing strategy (honestly there is never perfect pricing) but you need to have one and be able to explain why this plan.
Have a simple revenue model. There is single digit employee count in your company. You can’t possibly handle more than one revenue model / one geography in the first 2-3 years. Talk about the future revenues after you have achieved/ stabilised the current revenue stream in the current geography. You should have some ideas what the business would look like in 2-3 years because you will be asked that; but be clear to focus on the present.
Show clearly who your first customers are. If you don’t know who they are, you can’t find them or sell to them.
Demonstrate good understanding of your market and your competitors. Market sizing is key for venture funding. Do not take the global car sales number as your market sizing if you are selling the car tyres. And if you say “I have no competitors” – please check and double-check again. Very unlikely.