As a startup founder, one of the biggest challenges you'll face is acquiring funding. The best startup founders know exactly how to acquire the necessary capital to scale fast. With few exceptions, founders are unable to hire key employees, develop prototypes, deploy powerful marketing, and more without the right funding strategy in place. In many instances, acquiring funds quickly is the difference between achieving rapid startup success or getting outpaced by the competition.
The data doesn't lie — eight out of ten startups crash within the first 16 to 18 months, largely due to cash scarcity. In this article, we'll teach you how to get funding for your startup faster. Follow these five quick tips to get funding for your startup right away and scale to new heights!
How to Get Funding for Your Startup Faster
Are you ready to kickstart your fundraising strategy, attract top-tier venture capitalists or private investment firms, and acquire the funding you need to become a startup unicorn? Here's a quick-guide to achieve startup funding faster.
1. Create a Detailed Business Plan
Did you know that entrepreneurs with business plans are twice as likely to secure capital investments, qualify for loans, and successfully grow their startup? A business plan is much more than a tool used to raise funds. In fact, the business plan serves as a blueprint for scaling fast, staying on track, and avoiding roadblocks. For many startup investors, a business plan is absolutely required.
When building a business plan, be sure to include the following:
- Executive Summary: An overview of your startup's goals and objectives. The executive summary should be enticing. Show the investor why she/he should invest in your startup right now.
- Company Summary: If the executive summary is designed to intrigue, the company summary is designed to inform. The company summary should outline when, why, and how the startup was built.
- Market Analysis: A situational analysis that provides a detailed description of the target consumer, an in-depth review of the chosen market segment, and a comprehensive summary of market growth projections.
- Team Overview: An overview of the team's unique qualifications including education, skillset, and experience. The team overview section should include details on how the team is poised to orient the startup towards longterm success.
- Revenue Projections: An overview of sales forecasts, expenses, cash flow, income projections, assets, and liabilities.
2. Minimize Startup Costs
Secondly, show investors that you mean business by minimizing expenses. Many first-time entrepreneurs struggle to get funding without first showing some traction and a plan for potential success. And if you can play your cards right, scaling on a budget, especially during the early stages of startup growth, is an effective way to show venture capitalists and investors that you have the wherewithal to take your business (and their investment) into the stratosphere.
To minimize startup costs, try to:
- Evaluate Every Expense: Before every major purchase, measure the expense against the expected return on investment. How will this investment influence your startup's growth? Is it absolutely required to get to the next stage of growth?
- Focus on Profits: From the moment you launch your startup, focus on profits. If you've mastered the art of growth through profits alone, any additional capital you receive through startup investment will be an added bonus. MailChimp achieved astronomical growth exclusively through profits. In fact, Cofounder Ben Chestnut scaled the startup to $400 million in revenue without ever taking a dime from outside investors.
3. Ask Colleagues for References
Your colleagues can probably point you towards powerful funding opportunities. Don't be afraid to ask for a referral. Think about it this way — investors are more likely to invest if another entrepreneur can vouch for them.
To maximize your chances for investor referral success, be sure to:
- Examine Your Network: Asking for a referral requires a bit of pre-built trust and rapport. It doesn't make sense to ask for a referral from someone that you met two days ago. Look to the colleagues that you've known for awhile.
- Revamp Your Social Media Presence: Take a look at your social media presence. LinkedIn is the first thing investors look at after receiving a referral.
- Provide Contact Information: Don't forget to give your colleagues your contact information. Make it simple and easy for investors to get in touch.
4. Look for a Strategic Partner
Oftentimes, achieving considerable traction and acquiring top-tier funding requires more than one startup founder. In this instance, an old mantra rings true — two heads are always better than one.
"In our experience, startups with a strong founding team scale at a much higher velocity than those without," says Tina Wung, Senior Director of Marketing at RocketSpace. "Co-founders provide the directional insight, resources, and knowledge needed to take the startup to the next level."
5. Join a Startup Services Program
To really accelerate startup funding, try joining a startup services program like an incubator or accelerator. These types of programs are well-equipped to help you navigate any and all fundraising challenges. Additionally, some incubators and accelerators can provide you with direct access to strategic capital.
Acquire Smart Startup Capital
RocketSpace offers comprehensive Startup Services. This program is an exclusive initiative for growth-oriented startups. RocketSpace works directly with early-stage companies to create category leaders by dramatically accelerating the fundraising process and providing direct access to a global network of strategic capital. RocketSpace is committed to getting you a term sheet within three months.
The program is split into three distinct steps:
- Finance and Due Diligence Preparation
Startup Services is purpose-built to help you acquire funding faster, and with the right funding in place, your startup has everything it needs to develop next-generation products or services, hire top talent, and outpace competitors.