Discover How to Fund Your Startup Idea

| Updated on February 26, 2024

Every day, many different startups appear worldwide. Many of them subsequently close, while others achieve a positive result. Because of the big competition, achieving success with a new business idea is not easy, but it is possible with fundraising support. Many companies, startups, projects, and private entrepreneurs in various fields of activity received financing for their businesses thanks to fundraising.

How to Get Investments for a Startup?

Investors invest personal money – usually at the pre-launch stage of the project’s development. To impress them, you will need excellent presentation skills and a lot of luck. How does a startup get money from investors?

The investor wants to understand how the company plans to promote itself and how much it will cost to attract each client. Therefore, you need to be 100% ready to answer the following questions:

  • What profit will each client bring?
  • How do you plan to advertise? Where, when? What is your PR strategy?
  • What will be the typical sales cycle from the first contact with the buyer to the deal’s conclusion?
  • What is your social media strategy?
  • How much will it cost to attract a client?

If you have a business model, and a decent idea, getting money to help fund a new business will not be so difficult. People like to make their money work for them. And, of course, if you believe in the potential of your startup, you have every chance of success.

Essential Steps for Cooperating with an Investor

Before signing the agreement, you need to think of a Termsheet containing the following:

  • company assessment;
  • the volume of investment;
  • plan for using investment funds;
  •  the fate of the investor in the business;
  • terms and procedure of exit of the investor;
  •  investor privileges;
  • a non-disclosure agreement (NDA);
  • the status of the intellectual property of the project.

It doesn’t have to be some super-complicated 100-page document. Several pages with the parameters of your cooperation are enough. This is a guarantee of your peace of mind and stability.

How to Increase Chances of Receiving Funds?

  • Come up with an idea for the design of your document, and create a clear template. Then it can be supplemented or changed under the requirements of a specific investment fund.
  • Find a fund for small business assistance. Familiarize yourself with the requirements and conditions, and find out in which case you will receive funds and why you may be refused.
  • Read carefully what documents you will need to submit. Usually, it is necessary to provide a description of the project and a business plan.
  • You may be asked to fill in additional information about yourself or the project. The application will be considered, and a response will be sent by e-mail. Next, they may invite you to a public discussion, where you must personally defend your project.

How Can a Professional Fundraiser Help?

Only specialists with experience and perfect market knowledge, such as Waveup, can provide support fundraising assistance in finding and attracting finance. What do professionals offer?

Development of Business Plans

Professionals will develop a business plan for an investment project that will guarantee you 90% of attracting funds to a new or existing business. It will be designed according to world standards and consider the requirements of a specific bank or investor. A fundraiser can help you develop a business plan and give expertise to all the needed documents. The result of the consultation will be an understanding of the approach to strategy development.

How to start developing a startup business plan? To confidently talk to investors, the project initiator should not forget the main issues. Therefore, it is recommended to begin designing a startup business plan with a financial model.

Why should you start with a financial model? The economic model takes operational concepts from the entrepreneur’s head and puts them on paper, making them available for everyone to see. It becomes the basis for analysis and developing a business plan. A financial model is necessary to determine how well-founded a startup idea is. If you have a good understanding of the basic operating assumptions, you will be able to develop a model.

You must also understand the assets you will need to purchase to start the business. Assets are resources controlled by the company that expects economic benefits in the future. The organization can receive and manage the benefits of using the asset. Their presence guarantees to have a good income in the future.

Development of Internet Marketing Strategy

Modern marketing is a deep knowledge of Internet technologies, so the strategy must be prepared considering current evaluation and analysis methods. A professional fundraiser will determine the target audience, study competitors, and set up analytics: covering, conversion, and end-to-end.

Each startup is unique, so discussing tactical methods in detail is unnecessary. The strategy you should use is to build a good product worth recommending. If each user recommends you to two new users, you’ll get a good result and financial growth.

How to find out the problems of clients? The fastest way to understand why potential clients don’t convert is to ask them. Here are some recommended tools and techniques:

  • Install a real-time chat plugin that will allow you to talk to site visitors in real-time.
  •  Ask visitors to fill out a survey. Usually, it is necessary to stimulate it with the help of a discount or a small gift.
  • Ask for feedback on a forum where your customers are present.
  • Invite a familiar client to dinner or a conversation on Skype.

Using these tips, you will most likely be able to understand what is the barrier between visitors and conversion. And then, it will be necessary to make changes to the landing page to level these problems.

Building of Financial Models

A professional consultant will give fundraising support by developing a modern financial model that will allow you to effectively analyze complex and uncertain situations and model many business development options depending on input parameter changes.

Financial modeling is an essential tool for startup planning, allowing one to determine the practicality of launching a project and attracting investments, the effectiveness of the company’s activities, and the correctness of the development strategy. The absence of an economic business model is fraught with negative consequences of varying degrees of severity – from unreasonable costs to the complete failure of the idea.

The financial model demonstrates the current state of the company and the expected course of its development. How can you know the future? That’s true, and no one can predict what will happen tomorrow. Therefore, it is better to contact a specialist who will advise and provide a tool for understanding the company’s strengths and weaknesses and ways to optimize costs and increase profits.

Presentations Design

A fundraising specialist will prepare a bright presentation of an investment project for a quick and high-quality representation of a business idea during a meeting with an investor or for speaking at a startup conference. A short meaningful presentation will give a picture of ​​your project and its components.

The presentation should depend on your work style and the project’s specifics. The good old statistics and analytics reports work best, but if you can excitingly present dry figures and facts, it will be wonderful. The presentation has a comprehensive and structured beginning – a short story about your project and its positioning:

  • Who are you?
  • What are you doing?
  • What are your immediate and global goals?

You need to answer every question as precisely as possible. Basic information about you should already be provided so that the investor will be interested in continuing the conversation. As you know, there is no second chance to make a first impression.

Many founders of startups decide to attract third-party capital from private investors to scale their projects. However, investments are often necessary at the initial stages of business development when the question of attracting money is especially acute. Professional fundraising support will show you what nuances must be considered when searching for and interacting with a potential investor.

John M. Flood

John is a crypto enthusiast, Fintech writer, and stock trader. His writings provide guides to perform your best in the crypto world and stock planet. He is a B-Tech graduate from Stanford University and also holds a certification in creative writing. John also has 5 years of experience in exploring and understanding better about the FinTech industry. Over time, he gained experience and expertise by implementing his customized strategies to play in the crypto market.

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