Fundraising: A Boon For Startups While An Opportunity For Investors

What Is Fundraising?

 Fundraising, also known as crowdfunding is one of the toughest decisions and processes to take on during the early days and while growing the business. Fundraising is the process of raising money so as to accelerate the speed at which you can turn your business idea into reality and market it effectively.

 

When You Need Fundraising?

 

This completely depends on what is your present financial status when starting the startup journey. If you have some cash to start with, find out how long it will be good enough for and do you need more people to deliver your idea. Remember you can start the fundraising process whenever you want, but plan it very well so that you’ll get the most out of it. Usually, it takes anywhere from 4-6 months to get the funds and about one and a half years of coverage until you need to do another fundraising round. Thus, you can plan based on this. On the other hand, if you don’t have any money, but only an idea and a documented plan of action,  then start the fundraising early on. Also, you can postpone it for a while in case you can find some free volunteers, co-founder, interims or yourself to build the prototype, initial marketing efforts. Any other circumstances will need crowdfunding.

 

Where And Who?

Use the power of networking. You can start small but do it worldwide. You can start as small as asking your friends about funding depending on your business and share the idea with them. You can use social media channels like Facebook, Twitter, LinkedIn, etc., to go global in your search for investors. Apart from this, participate in meetups, conferences, and events where you can make good connections and tell your idea and get feedback. Apart from this, you can search for the best Fundraising Platforms for Startups online as well.

How Much Money  Need To Raise?

It depends on your business plan and how much you have from your cash. Target raising enough to create about 18 months' worth of roadmap, pretentious you can hire the right people fast. In addition to this, the amount asked for is related to the stage you want to apply for funding at. If you launch the idea of crowdfunding, it’ll be a small amount to get you through the validation phase and create a small user base. As a startup, you can expect between 100 thousand and a million dollars in your seed round.

Remember your give up a portion of the company to your investors with each round of funding. Generally, startup businesses skip the seed round and raise a few million dollars of series. Also, financial support right out of the gate and this tends to happen more for repeat entrepreneurs and experienced with good connections.

If you are not wealthy enough to get your product or service through, the early phase of your startup up to building a money generating user base, and later you need to think about fundraising. This might well be the key to the success of your startup business.