According to a recent survey, 94% of new businesses fail during the first year of operation. Lack of funding is one of the major reasons. Capital is the backbone of any business. Entrepreneurs usually ask how to raise money for their startups.
Here we have listed some of the steps on how to raise startup capital for your business.
1) Decide on your Main Feature(MVP)
What is the one thing that your product does very well? MVP is based on the concept that you can provide sufficient customer value by delivering minimal features that early adopters will use. A lean team can usually build one feature fast than burning out.
2) Create a prototype
The prototype not only shows how the product will work but, even more importantly, it proves that you’re a knowledgeable entrepreneur dedicated to your project.Prototype just that one feature and visually show how the product works.
3) Test with 100-500 customers
Run Google Ads, Facebook Ads, ask people in shops, make a landing page, email if the prototype makes sense to them.
4) Build a functional prototype
Once you have a virtual prototype, you’re ready to build a functional prototype. If you have the skill, you can build one yourself. If you need help, there are several types of resources you can tap to get this step done. One way is going to a professional prototype designer. An alternative is getting a designer or engineer to build your prototype. To minimise the cost see if you can build on wordpress or app builder.
5) Get traction with 10000 people
Try everything on Facebook, Twitter, email, celebrities, bloggers, partner with other startups, etc. Brand yourself and connect with influencers. Leverage your email list. Many companies have used email marketing to gain traction since it allows them to speak directly to the customer, send special offers, keep them updated.
Monetizing is not necessary if your traction is high. But if it is not, you can monetize and your chances with investors will be higher.
Now ones you have traction and cash, develop the product to scalability. You can do this on Python,PHP, Java,Ruby etc.
8)Create a pitch
Create a simple pitch deck with product, market size, team, monetization strategy if any. Get to the point fast. It’s a known fact that attention spans are getting shorter and shorter.
You can create a profile on Angelist. This will enable you with quickly getting acquainted with several investors. Have a classy intro and tell them why they should invest in your startup.Use Linkedin and Angel.co etc to find them.
Show you are sharp and trustworthy. Tell everyone what you are doing, sooner or later you will be referred to the right person.
11) Increase your chances of fundraising
Keep improving your product. No investor wants to fund marketing or development. Investors prefer to invest in scaling.
Never give up! Trust the process and keep going. Mail us at email@example.com.