What Not To Do If You Are Looking To Get Your Business Funded

Venture Capitalists and Angels are constantly looking to invest in various startups. Every one of them wants to bet on a winning horse. Otherwise, what would be the purpose of taking such a high-risk gamble. No matter what stage your startup is in, you would probably need some dollars to keep it running, and/or for future purposes. While looking for funding, there are a lot of things that need to be done. Making sure that every one of them is done right is a priority, otherwise it could affect your funding process.

There are many different kinds of investors out there. And they have different ways of doing business. So there’s no set way to determine what they are looking for in a startup, or what their ambitions are, or the reasons for not taking up on a project. We’ve compiled a list of what not to do when you’re looking to get funding.

  • Many investors consider the team behind the startup as more important than the idea or the product. They want to know if the team has what it takes to survive and grow in the startup environment. Lack of teamwork and collaboration can take a direct toll on whether your business would be funded or not.
  • Early traction or customers are essential. Investors always want to know if there is an existing user base of the product, or how the distribution activities are being handled. After all, in the end it all boils down to the amount of buzz you can create around your brand to give it an early push towards success.
  • VCs are looking for founders who truly understand the financials and the key metrics of running a business. To be able to articulate them coherently, you need to have a handle on all of those.
  • What is it that your product does? What real-world problem does it aim to solve? Why is the company’s product so great? These are a few questions that will be on every investor’s mind. It is important you bring out the entire essence of your product, because holding back any cards will only hamper your chances at getting funded.
  • Having a plan on how the capital you’re expecting to receive is also important. Investors would want to know how the funding would be used, and what progress will be made once you receive it. They would also want to know the financial projections of the company, to ensure they’re not investing in a high-risk environment.
  • What makes you different from the other existing players in the market? Does the company have differentiated technology, or a market-bending strategy, something that gives you an edge over everyone else, something that makes you a bet worth gambling on for the investors.

Often, many of these issues apply to founders who seek funding for their business. Being oblivious to these won’t be of any help. Again, the aim is to impress investors with your product/idea/business, in every way that you can imagine.