Look around. You’ll notice a clear pattern. Startups, big and small, continue to struggle to get the funding they need. Even with sound business models, it seems impossible to secure enough funding to get a product into development. Many companies never get off the ground because they lack funding.
Why Do Some Get So Much and Then Fail?
Then there are companies that easily capture funding without a proven business model. The results often include massive losses and folding. Anki, a startup building a cute little robot that got a lot of attention, folded. The company raised $128 million before shuttering its doors because it wasn’t profitable. Another example is Munchery, well-known in the food delivery space, it folded after raising $117 million, as noted by CBInsights.
If you have a profitable business, but you don’t land on TechCrunch or VentureBeat, why can’t you raise funds to support your business?
Why Is Funding So Out of Reach?
The answer to this question is rather simple. Funding is hard.
- It’s hard to prove that a new product is worthy of an investor’s time.
- It’s impossible to follow a clear-cut path because the fundraising process is fluid and different for each company.
- It’s hard because pitching requires a lot of work and effort, something many investors just don’t put enough time into.
The reasons are endless. Unlike borrowing money to buy a house or purchasing a car, there’s no simple form to fill out to prove your worth or that of your business. What’s more, you need to reach the right investors at the right time and deliver the perfect pitch to turn heads.
Your Inexperience May Be Costing You
Funding your business is necessary to develop that product or get the app made. Yet, you can’t secure funding without having an app to show investors. How do you prove yourself? If you’ve made a name for yourself previously, that’s going to work in your favor. If you’re just starting out, it can seem downright impossible to get that fits bite from an investor.
So, What Can You Do to Move Forward on This Difficult Path?
It’s easy. You need to learn the process of fundraising. It’s not a simple form, but there are several steps that you’ll need to follow, in order, to help you to structure fundraising that gets authentic attention from verified investors.
It’s all about:
- Determining the right structure for your funding, whether that is bootstrapping or angle investing.
- Choosing the right investors to target for your raise — not just any investor is worth speaking to.
- Then you need to create a stunning pitch, one that shows you’ve put a lot of hard work into it.
- Finally, there’s investor outreach, the process of reaching out to the investors who have the means to turn your idea into a true startup.
If you’re feeling stuck or like giving up because your idea hasn’t captured the eyes of the dozens of investors out there that you’ve presented it to, think again. The right process allows your idea or product to stand out on its own, allowing it to bring investors to you with interest.
Pulling together enough capital to really launch your product isn’t easy for anyone. And, anyone that tells you it’s simple — even those unicorns that have made it big aren’t being honest. If you have the right process, though, you can make fundraising less intimidating, increasing your ability to score big.