Tag: fundraising for business

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Business motivation

How To Avoid 3 Common Fundraising Mistakes Entrepreneurs Make That Can Sink A Business!

How To Avoid 3 Common Fundraising Mistakes
How To Avoid 3 Common Fundraising Mistakes

Starting a startup might seem all exciting and there could be times that everything falls into its respective place. You think about starting a business and the customers come knocking at your door since day one.

You raise funds easily and your first pitch to your investors is a rip-roaring success. Everything goes according to the script, even if you didn’t think too much about it. But what happens when you couldn’t able to generate investment for the second round? What happens when things go wrong?

Watch everything that you need to know about Fundraising in this video:

The problem with effortless success is that it does not prepare you for the worst. Some so many entrepreneurs tasted early success in their entrepreneurial journey, but things got a little tricky when additional capital was required. Their numbers were bad and their business looked like a nightmare which put the investors off-board.

So what are those BIGGEST mistakes of fundraising that every entrepreneur must avoid? Here is a list:

1. Catastrophic Mistakes

There are plenty of crucial decisions to be made over the first few raises. Entrepreneurs must decide how to pick the right investor for their business, whether they should try crowdfunding, and how to evaluate their business. The important steps can help to take the business to successful heights. But these are the areas where people can make catastrophic mistakes.

How to avoid it?

The starting point is the exit! What many people don`t realize is that taking investments puts you on a path to exit. Every investor wants to get off in 6-10 years with a return. So looking at the stages to exit is the place from where entrepreneurs should think further than expected. Also, one can take professional help from the best business coach in India.

2. The Correct Numbers

Focusing on numbers is one of the most essential things if you want to ensure that your business sustains in the long run. Many start-up businesses fail to thrive ahead because the founders couldn’t raise a second tranche of money. Numbers are critical even at the pre-revenue stage and therefore it is vital to work on the financial plan. Most founders overestimate the cost and the period it will take to hit targets.

How to practice it in the real world?

So understanding the biggest gap that exists in the business models is between what is being projected and the actual cost bases is very important. Investors typically look for businesses that can understand their cohort financial analysis, customer acquisition drivers, and churn rates. Hence, an in-depth understanding of unit economics and how it can be improved can help any business to sustain itself for a longer time. However, hiring a business coach too can help you navigate the challenges of fundraising.

3. Unpicking Experience

To err is human. And one of the best qualities that humans are bestowed with is their ability to learn from them. But is the fact that someone has made mistakes and learned a valuable lesson from them is necessarily a reason to trust their judgment? Well, certainly not!

Unless humans make mistakes, their learning will never start. However, it is not advisable to carry the burden of past mistakes over their shoulders. Many entrepreneurs carry the weight of their past business mistakes to their present and future. But dwelling on past mistakes results in nothing more than unhelpful introspection.

How to avoid it?

Learning from past mistakes is something that every successful business leader must do. Also, if you take help from a business coach he or she can probably help you to learn from their professional mistakes which is probably every essential.

Fundraising is certainly not easy! Even if you find investors in the first round easily that does not guarantee for the next investment rounds to be that smooth. Hence, only by understanding both the thinking of investors and the pitfalls that may lie ahead, businesses can be better equipped to obtain the funding they need. And taking the professional expertise of a business coach can demystify the investment landscape for entrepreneurs.

To know more about fundraising and investment strategies, take our ‘Entrepreneurship Course’ which is a specialized online business course tailor-made for those who want to pursue their entrepreneurial goals!

Categories
Finance

4 Smart Ways to raise fund for your startup without Investors

4 Smart Ways to raise fund for your startup without Investors

Building a business from the ground up is often very hard. To build it without the initial capital investment from the investors can be even harder. It may take a little longer, but starting a startup in India without the burden of investors can yield benefits that outweigh the cons.

You can be in complete control of your destiny, and can quickly change the business direction whenever it`s needed. Here are 5 ways in which you can do fund-raising for business without investors:

  1. Do not quit your Job

Since starting a startup business in India without investors can leave you with a lack of funds, it is always a cool idea to continue with your day job. This will give you the advantage of saving your salary.

  1. Government Loan Schemes

Whether you want to start your business without an investor or unable to find one, you can still fulfill your entrepreneurial dream, thanks to government schemes. To focus on ‘Make in India’, the government has started a few loan schemes.

Schemes like CGTMSE, MUDRA, and Stand-up India can provide you collateral-free debts and can get access to low-cost capital.

  1. Use your Revenue to do Fund Raising

Not all startups are pre-revenue generators. Many startups have customers and monthly revenue, so why not plan smartly and use that money to grow faster. A Revenue Based Loan can turn your revenues into growth capital and can help you to do fund-raising without an investor.

  1. Crowd Funding

You can also raise money through crowd-funding. Crowd-funding refers to raining money from a large number of people who contribute with a small amount of cash. The process of crowd-funding is typically done via online platforms.

Make Necessary Sacrifices for Business

A business is like a baby! Hence, be ready to give all your time and attention. Not just that, you must be willing to make sacrifices to free up your time.

As an entrepreneur, you may want to taste success as soon as possible. However, patience is the virtue that makes any business successful. You may feel challenged at the initial stage of building a start-up. If not prepared, you may have to suffer losses too. Hence, get all the information and knowledge from the industry experts.

Learn from their experience to take your business ahead with our Everything about Entrepreneurship course. To know more, click here: https://www.badabusiness.com/?ref_code=ArticlesLeads

Categories
Startup

How to raise funds – Pitch Deck explained by Mr. Ratan Tata

How to raise funds - Pitch Deck explained by Mr. Ratan Tata
How to raise funds - Pitch Deck explained by Mr. Ratan Tata

What can a well-designed pitch deck do for your business? To begin with, it can inspire the world’s best investors to invest in you.

Having an impressive Pitch Deck is a key component while fundraising for your business. A powerful pitch tells your potential investors that you are ready to raise money. It shows how prepared you are. How well do you know your business model, information about your team and more. For the investor, the Pitch Deck is the first window to your venture.

The Pitch Deck is the first thing that will keep your investors engaged to know more about your business.

Below are 10 powerful tips you should always keep in your mind while making the Pitch Deck. The recommendations have been made in the pitch deck by Sir Ratan Tata.

This will give you enough confidence to design and present a killer Pitch Deck for fundraising for your business.

1. Problem

This is the first slide of your presentation is to make the investor understand about your preparation. This slide will cover the problem of how you are filling the gaps in the market. What burning problem you are solving? A problem with the people can relate and the investor can understand.

The investor will have 3 solid reasons to involve in your venture:-

  • There is a clear sense of ROI.
  • The investor has experienced the same kind of problem in the past.
  • Their expert find it good to go

If your investor falls in these 3 buckets it means you got the lead investor.

2. Solution

  • A solution should be very clear and to the point. After the problem, investors always look for the solution.
  • Now you have to show your investor how your company and product will address the problem.
  • Most of the entrepreneurs focus on their product when instead they need to focus on their customers and the burning problem they are facing.
  • Try to use pictures and stories when you describe the solution.

3. Unique selling proposition

  • Is your product is unique enough to solve the problem of the customers? Is your product can attract your customer’s attention?
  • If the answer is yes! Then you have got the lead investor.
  • You need to work on the characteristics which can make your solution a “never-before” solution.

4. COMPETITION & BARRIER TO ENTRY

  • An image or a diagram is a good idea to tell the investor about the competitors that you have in your space. How you compare them and where you land with the value proposition.
  • You should clearly differentiate your product and company from your competitor which will make your company unique for the investors.
  • This uniqueness of your product will also create an entry barrier for the other competitors.

 

5. Revenue Model

  • Now that you have already explained your product/service, you have to talk about how your product will make money.
  • You have to discuss how your pricing will fit into the market.
  • The investor will keep an eye on how you will undercut the existing solution in the market with your pricing and will your customers be ready to pay that price?

6. Target Market

  • This slide will share the 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 solving and the scope of getting success.
  • Always remember that the more specific you are with your targets, the more realistic your pitch will be.
  • The market size will decide whether you are getting the funds or not because if you are operating a small market then the investor might find the potential ROI small and risky to fund.

7. The product/Service

  • In this slide, you have to show the unique features and value to impress the investors.
  • This part of your Pitch Deck is all about to show off of your product/service.
  • Use pictures, screenshot, descriptions, quotes and testimonials from your previous customers to show how much they love your service/product.

 

8. Milestone

  • Investors like to spend more time to look over in this slide.
  • It should have your company project growth over the last and next 3-5 years with the detail of the finances and business model.
  • Your economic plan can also be shared in this slide which can include the distribution channel, operational structure and a plan to make money in the future.
  • No one can do the prediction 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 next 3 years, if possible. This will give your investor a clear picture.

 

9. Funding so far

  • If you already have investors on board, now is the time when you should talk about why they choose to invest in your company.
  • All you have to provide is a summary of the investments. This will help you build credibility and validation of your company.
  • Also mention a realistic number raised through the other investors and the commitments if you expect to fund.

10. The Team

  • Here you have to mention the key role and expertise of your core team members.
  • Describe the unique value of each team member brings to the company. Also, talk about their seriousness and passion for the project and why they choose to work with your company.

Now that you are very much clear about the Pitch Deck, let’s take a look at some common dos and don’ts which will also help you in fundraising for your business.

Do’s
 Don’ts
Use bullet points in the slides Don’t fill your slide with text
Do include your contact details Don’t add too many team members
Tell a story while presenting Do not only focus on stats
Do elaborate the slides Don’t only read the slides
Use a powerful template to create the deck Do not over design

A solid pitch deck helps you secure the funding and will convert your business idea into a reality.