Have You Done Your Homework Right? 7 Startup Financing Myths To Know Before Raising Funding

Ok! So you are finally nearing the time when you would be raising your first round of funding. You are sure you have done all your homework. You are ready with the pitch, you know how you would convince your investors and, you are pretty much sure you would land a funding.

But, wait. You, like many others, might have been influenced by some of the most prevalent startup financing myths which might end up turning off your investors.

Have a look at the following Myths compiled by Reid Hoffman and you might save yourself from sounding like an idiot ready to dump your investors’ money down the drain.

Myth1: The startup Financing Process is about one thing- MONEY.

Truth : A successful financing process results in a partnership that delivers benefits beyond just money.

Myth2: If your team is strong, show the team slide early in your pitch.

Truth : Open your pitch with the investment thesis.

Myth3: All investment pitches have the same structure.

Truth: Decide whether your pitch is a data pitch or a concept pitch.

Myth4: Avoid bringing up anything that might paint your business as risky and decrease investors’ confidence.

Truth: Identify and steer into your risk factors.

Myth5: Arguing that you have no prospective competitors is a strength.
Truth: Acknowledge all types of competition and express your competitive Advantage.

Myth6: Don’t compare yourself to other companies because you are unique.
Truth: Pitch by analogy.

Myth7: Focus on today’s pitch. The future will take care of itself.
Truth: Think also about the round after the one you’re currently raising.

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