Raising startup funding is anything but simple. However, the proper preparation can make a huge difference in making the process as successful and painless as possible.
Mashable’s “Behind the Launch” video series features Zain Jaffer, co-founder and CEO of Vungle, who notes:
“There are many stories of hot startups raising killer seed rounds, and it can feel like money is flowing everywhere. Times might be good right now, but raising external capital is a complicated process, and it’s something every entrepreneur needs to think about carefully.”
Jaffer lays out seven tips to help startup companies achieve their funding goals as quickly and pain-free as possible:
1. Be Hungry
This is arguably the most important quality for anyone starting a business. Jaffer urges founders to stay hungry even when investors start showing interest and money starts rolling in. One can never afford to be complacent when raising funds.
2. Adjust Your Mindset
Jaffer encourages founders to think of relationships with investors as potential partnerships for life. It’s easy to slip into the habit of treating potential investors as dollar signs with a pen, but a little bit of respect can go a long way.
3. Have Integrity
4. Maintain Confidentiality
It’s important to avoid over-promising, telling half-truths and, even worse, lying to potential investors. If you’re caught in the act, you’re at risk of not only losing the investment, but damaging your reputation. At the same time, Jaffer recommends not disclosing the names of potential investors to each other to avoid having them turn against you.
5. Have a Big Vision
6. Target a Big Market
As Jaffer notes, investors look for startups with high long-term growth potential. Don’t lose site of the long-term in your proposals. One way to boost your growth potential is to target a large demographic or geographic market.
7. Know how to frame the product
Instead of focusing on details and technical aspects of your product, Jaffer recommends looking at the big picture: how does your product solve a problem or inconvenience?
Does your pitch to investors meet these criteria? What others would you offer?