How To Raise Money For Your Startup

Raising money is simple but not easy. This guide illustrates one way how to raise money for a startup, especially for first-time entrepreneurs. We have seen quite a few entrepreneurs go from nothing to a funded company. This infographic is a generalization of their experience. Let us know if you have any questions about it in the comments.

Source: Funders and Founders

Over the last three years I have seen over a thousand startups in their early stages. I witnessed many of them go from an idea to funding within several months. I have also seen some of them fundraising for years and not getting anywhere.

Few More Tips How To Raise Money

When it comes to funding, there is one thing that can increase your chance of getting funded astronomically – traction. Yet, founders often struggle to get traction and hope that investor money will help them get it. This problem can be solved if you start lean, test your product and and gather meaningful feedback from your customers.

Use that feedback to modify your product. After you get traction, you are certain to get interest from investors. How much traction? Compare yourself to your competitors at the moment they got funding and use that as a benchmark.

Preventing people from raising money successfully, the other myth is that you can raise money before you build anything. Even if you are not an engineer, you can build a prototype of your product. You can do it in WordPress, another content management system (CMS), you can learn to code the basics. If you do not go out of your way to build your own product, why should other people risk in joining you?

Finally, when you are going to raise money, have the investors feel good about what you are going to spend their money on – not marketing, not development, not business development, but scaling.

Sources:

• businessinsider.com
• secondmarket.com (On the size of angel rounds.)
• quora.com (On the best prototyping strategies.)
• Demos and pitches of 600 startup founders we have seen at Funders and Founders.

[Editor’s Note:  This article was written by Anna Vital and originally published at Funders And Founders. Copyright 2013.]