You've moved from idea to planning, strategy, and finally got your startup off the ground. Congratulations! Now you need some money!
If you've been keeping tabs on the public opinion, you must have seen loads of advice about angel investors, pitching, venture capitalists, crowd-sourcing, and the whole nine yards. But before you join the bandwagon of startups looking (praying) for an investor to come save them, you should answer these questions.
First, what happened to your own money?
The answer to this question seems rather obvious, but think for a minute before you answer. If your spending habits caused you to be cash-strapped, you better think twice before asking investors for any.
Regardless of how lofty your startup vision is, if you can’t develop a working garage model, most investors will really not take you seriously. Major reason being that you are a gamble with very high stakes. Investors aren’t gamblers, they're business people.
Why exactly do you need an investor?
To purchase new (fancy) toys, to be like the big leagues (when in reality, you are not), or to scale? The answer to this question is crucial.
Where are your friends (and family)?
If this category of humans who love you dearly (for the most part) don't see any reason to put down their pennies for your startup, there is hardly an investor who would want to. You must make them believe in your dream enough to want to put cash down.
Have you done the numbers?
Do you really want to share ownership of your startup? Are you ready to go through grueling questions from people who (for the most part) don’t see the vision you see? Are you ready to be stripped of the Founder/CEO title you are so proud of? Wait. Sometimes we are blinded by the present and our vision is poor. Think it over and over. Discuss with your mentors and friends and sleep over it.
What other options do you have?
One of the best ways to raise money for your startup is to increase sales, networking, collaboration and skill acquisitions will help boost you command higher market prices. Pursue this passionately and you may never need an investor again.
Are you ready?
Prepare your elevator pitch, develop your plans and models but know this: not everyone will be interested in what your startup has to offer and not everyone will be interested enough to put funds into it.
One last thing
Put yourself out there, attend events, meet people, and keep talking about it. You never know who may be listening.
Got anything to add? Tell us in the comments below.