Wednesday, December 21, 2011

Positioning Your Company for Securing Capital

The following factors can help increase your chances of success in securing capital for your early stage venture:

  1. Aim to bootstrap or self-fund/partner fund for as long as you can until you reach key milestones
  2. Build your product first and be sure to get customer validation. Very few ideas that are just brainstormed on the back of a napkin get funding these days.
  3. Be sure to have a strong management team and advisory network. Consider getting well-respected or well-known advisors and have them invest a bit in the company to show they also have skin in the game and believe in your idea.
  4. Try to stage your capital raises to be around the same time or right after key milestones.
  5. Look into grants and government funding whenever possible.
  6. Raise capital whenever you have the opportunity to and aim to have at least 18 months of cash to last you through the capital raise process
  7. Continue to always leverage and expand your network. Referrals are much more likely to get you a meeting with investors. Also, be sure to follow up and be aggressive with the people you meet. With each new contact, try to get five new names from them for additional people you should meet.

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