Raising capital is just like any other marketing campaign. Only with capital raises, your marketing YOURSELF (and your COMPANY!), rather than your product. Some facts founders should be aware of:
It Costs Money to Raise Money
You’ll need to set a budget for your capital raise, like any other marketing campaign. You’ll need to attract investors; build your network; create marketing materials to generate interest, and often have expenses for financial preparation, presentation materials, travel, and more.
(And it’s not over yet!)
Just when you thought the deal was closed…you need to keep the communication with current investors going, AND continue reaching out to new investors. Think of fundraising as your other full-time job.
Because Investors can (and do!) change their minds at any moment
It isn’t over until you have the funds in the bank. Just like in any sales pitch, you need to Always Be Closing (ABC!). That means everything you do should be designed to have the funds sent to your account. handshakes, emails, agreements and Letters of Intent mean nothing until the funds are in your account. That’s all you should care about.
Until then, keep pushing. Make new connections, follow up with other potential investors, send email updates etc.
Its a Forever Process
You’re basically always going to be fundraising. Start the conversations early, and have them often, to create relationships. If the relationship seems to hit a dead end, let it go cold for a few weeks/months and follow up with some development or news that can warm it up again.
There is Always Capital Available
Yes, raising capital in 2022 was hard, and 2023 may not be any easier. Markets are soft, and yields (risk free rates) are higher. But don’t let anyone tell you that that’s an obstacle. Your company should sell itself. Investors are deploying capital even in the worst of markets. You just have to articulate your idea in such a way that soft markets don’t matter. Be diligent. Talk to more investors. Work harder.
You’ll need to speak with dozens, perhaps hundreds of potential investors before you get a warm one. You’ll need to speak with dozens of warm investors before you get a “maybe”. You’ll need a handful of “maybes” before you get to YES. You need ONE YES to continue on your path, building the next amazing thing. You can do it. We can help.
Revtap is non-dilutive Venture Capital. If your business is generating revenue, reach out and we’ll show you how to leverage those revenues into capital, without losing control.