It’s never too early to start planning ahead for a successful fundraising round. Here are some of the things you should think about before looking to raise money for your business:
Bootstrap your business
Seedrs is open to businesses that may be at an earlier stage of development than when most institutions, or even angel investors, would normally invest, and we recognise that capital is important for growth-focused businesses from the very beginning.
That said, you should achieve all that you reasonably can without money before you look to raise investment, anywhere. Investors will want to see that you are truly committed to your business, and that you have the key entrepreneurial talent of creating something out of nothing. So if your business is no more than an idea, it’s probably best that you try to reach and exceed as many milestones as you can with it before you look to raise investment.
Understand what fundraising means and takes
Raising investment for a business means taking on investors. Whatever the funding methods you choose, raising investment is often a full-time, dedicated process for a founder, and this often takes months of planning and pitching before investment is raised. It is rarely simple but is one of the most important things a CEO, CFO or founder does.
Also consider the different routes to capital you have. Consider the pros and cons of each for you and your business now, and how they could impact your growth in the future.
Have a team in place
Businesses depend on different skill sets and expertise to grow. No entrepreneur has every single skill needed to cover every aspect of launching and growing a successful business alone. Many investors prefer to invest in a team with a broad skill set and support system.
Think about valuation
Valuation is the process of determining the current worth of a business. There are many qualitative and quantitative techniques for valuing companies and we believe it is more of an art than a science. The price that you charge for the equity given away determines the company valuation at that point. The best starting point for determining a valuation is to figure out how much money you need to reach your next growth milestones and how much percentage of equity you are willing to give away at this stage of the business. If you have, or have spoken to, angel investors, they can often provide a good ballpark for where your valuation should be.
6-12 month plan
We aren’t big believers in 100-page business plans that attempt to address every possible thing the company may do over the next few months or years. But before you raise capital, it’s important that you have a strong idea of what you’re going to do with that money and where you want your business to go over the coming year. Having this plan will also be critical to determining how much money you’ll need to raise. This could be in the form of a pitch deck or business summary.
Have a look around
If you think equity crowdfunding could be a good fit for your company, make sure you know everything about us like our fees, our basic term sheet and how the process works – both for you and for investors. At the very least, register and have a look around the platform to see if we’re a good fit for you and your fundraising priorities.