Whether it’s for charity or your scale-up, fundraising can be likened to the most gruelling endurance race. Though sometimes it’ll be an easy ride, mostly it’ll seem like you’re struggling to get up the steepest incline. Herewith our top six tips on how to best reach your funding goals without getting wheelie tyred….
1 It’s all about the peloton
In a road bicycle race, the peloton is the main group of riders who work carefully together as a team to reduce drag and conserve energy. This synergy is just as crucial in business; if there’s one thing every experienced investor knows, it’s that the team is the most important factor when considering handing over their cash. If you’re an entrepreneur, it doesn’t matter how great your idea is, if your management team isn’t all working towards the same goal within a fluid, collaborative and focused strategy, your fundraising will hit the kerb before you’ve even left the blocks.
2 Wear your helmet, as the knocks will be tough
You’re raising finance and things aren’t going as well as you’d hoped. The questions are tough, there might be criticism of your business model and your ego is bruised. Experienced founders know that the fundraising road can be full of potholes – if you fall off, you have to get back in the saddle. Learn from your mistakes, don’t take it personally, listen to any offered advice and if you need to rethink your strategy, do so and try again.
3 Keep your eye on the road
Your fundraising is going well, you’ve got the investment you’ve been looking for, now you can relax and coast, right? Wrong. Even if you’ve closed your current round and it looks like an easy cruise downhill, you have to maintain the fundraising mindset. The odds are that you’ll need to seek additional investment further down the road, so you have to keep an eye on your current investors – regular updates, news (both good and bad) and an honest, open dialogue is a good place start. If they’re neglected and treated like ATMs, they’ll be far less likely to want to fund you later and – crucially – won’t recommend you to other potential investors.
4 The more streamlined you are, the faster you’ll go
Cyclists don’t wear lycra just so we can laugh at them. They wear it to streamline their bodies to reduce drag and, if they’re racing, it gives them the best chance to reach the finish line first. The same goes for your pitching presentation. There are record numbers of start-up and scale-ups in 2019 and if you’re to stay ahead of the competition, your pitch needs to be concise, focused, and unencumbered by unnecessary details. Angel investors are flooded by deal choice; in order to win their cash, you need to show them that you’re ahead of the pack.
5 More Tour de France, less velodrome
Fundraising is not a quick sprint (though it can feel like you’re going round in circles at times). It can be a long and exhausting process as it takes time to find an investor who’s a perfect fit for your scale-up. They may want to conduct a thorough due diligence process, such as researching the market, your forecasts, the competition etc and this takes time. Be patient, conserve your energy and ride with it.
6 Don’t forget your pump
Preparation is key, whether you’re cycling or fundraising. Before you set off, you’ll need to make sure you have all the tools ready in order to successfully complete the journey. The most successful fundraisers know that before you even get started, you have to get everything in place. From the legals, the financials, the forecasts, the market to the team, the more prepared you are, the greater chance you’ve got of achieving your goal.
The Envestors team is cycling 26 miles from Richmond to Windsor on Friday May 17, fundraising for MQ Mental Health, a great charity that funds research in how best to tackle this debilitating and widespread problem in the UK. If you’d like to make a donation, click here
Need to release the brakes and pump up your fundraising activities? Follow this link