Funding a startup is always something of a tricky proposition because there’s no “one size fits all” approach to what you are trying to do. Even if this is not your first swing at the ball, so to speak, there are a huge number of variables that affect just about every aspect of the funding process.
The type of business you are trying to start, the product or service you want to create, the audience you are trying to serve and even the team you have surrounded yourself with will ALL play an important role in just how successful you ultimately are.
Because of this, many of the important considerations to keep in mind when funding a startup are not hyper specific “do this, don’t do that” tips and are more about larger ideas and essential perspectives. All of which can be adapted to meet your own needs to help bring your organization to life.
By Payman Taei
Funding Success is Directly Tied to Your Ability to Communicate
One of the most important advantages that you have when funding a startup also, unfortunately, represents one of your biggest challenges.
All startups are founded on some type of unique idea that make them so special and worth fighting for in the first place. You have worked hard to identify a problem in a marketplace that only you can solve or some way in which you can make the lives of an entire audience better. This idea, regardless of how simple it may be, is the very foundation upon which your entire startup will be built.
But sadly, oftentimes actually communicating that vision is a lot easier said than done.
Your ability to get the funding you need during the early stages of your startup will depend on your ability to communicate that vision in the most effective way possible. Part of the challenge is that you don’t necessarily have anything you can turn to in order to provide a clear example.
If there are too many situations where you find yourself going “our product or service is like Company X, but slightly different,” this is only going to raise more questions about the validity of your concept than it answers.
If your startup is founded on an idea that is truly unique and has no equal, you need to latch onto this idea and broadcast it far and wide. This, in turn, will require you to have collateral designed to play to that strength at the ready.
Think about the type of collateral that you create to speak to consumers – how you take those reams of boring data and visualize them with a tool like Visme (which I founded) and turn them into a stunning Infographic.
Think about how certain high concept ideas are easier to digest not in the form of a 1,000 page white paper, but by way of a terrific presentation paired with all sorts of visual elements.
These are exactly the types of techniques that you need to be using when both initially attracting and communicating with investors.
You need to be able to use these types of materials to make them see what you see. They can’t just understand what makes your business model unique – they have to believe it with the exact same amount of fire and passion that you do.
This is only something you’re going to be able to accomplish with the right types of materials, which is why pulling any and all techniques you can from the B2C marketing world and making them work to your advantage during funding is of paramount importance.
On the plus side, once you get the hang of convincing investors that you’re as unique as you say you are you’ll have a far easier time presenting that message to consumers, too. Some of the videos that you’re creating during this time can even be repurposed later and monetized using a service like Uscreen, too.
But Whatever You Do, Don’t Come Off as Desperate
Another important consideration when funding a startup is directly related to the one outlined above. Yes, you’re trying to visualize what makes you unique and at the end of the day, you’re still asking for an incredible amount of money to bring your vision to life.
But whatever you do, don’t come off as desperate or your journey will be over before it’s started.
Many experts agree that one of the best ways to raise money is to act like you don’t actually need money at all. Don’t go into a room acting like you need a favor – act like you are doing them a favor by giving them the opportunity to get in on the ground floor of something special.
The elements you need to pour all of that passion into are your vision, your team, your product or service and your customer base.
Focus all of your energy on these areas and leave your desperation at the door.
Funding is a Multi-Layered Opportunity
Finally, one of the most important things to consider when funding a startup is that you should not just be looking for investors. You should be looking for trusted advisors as well.
When you meet someone who is just as excited about your startup as you are, do not let your relationship end as soon as they write you a check. Instead, let this be the beginning of something much bigger and more important.
Even though money is a very legitimate concern for young companies, you should focus less on chasing the literal dollar and more on the hypothetical value that the dollar represents. If you are good enough during the funding process to actually attract the attention of people who A) can see the world through your eyes, and who B) want to do more than just fund, it is an opportunity that you should absolutely seize hold of.
At the end of the day, this will bring far more value to your business than a simple check ever could.
About the Author
Payman Taei is the founder of Visme, an easy-to-use online tool to create engaging
presentations, infographics, and other forms of visual content. He is also the founder of HindSite Interactive, an award-winning Maryland digital agency specializing in website design, user experience and web app development.