Posted: Wed 19th Oct 2022
Access to funding is the biggest barrier to entrepreneurship for women, with female founders feeling 81% less likely than men that they can access the finance they need for their start-ups.
The thought of raising investment can feel overwhelming, especially for female founders. Ask any woman who's leading a high-growth start-up, and they’ll tell you they already have way too much on their plate.
Embarking on the task of going out to fundraise can feel like you're at the bottom of a mountain, with that money you need right at the top of it, and it's going to be a long and tough climb to get there (if you get there at all).
But leading a start-up doesn’t mean you have to put in a 100-hour week – it’s about working smarter, not harder. And that principle also applies to the process of raising investment.
Fundraising successfully while running your business, dealing with life and staying sane is about breaking down the task ahead into bite-sized chunks, so you don’t become overwhelmed. It's a step-by-step process.
Step 1: Company
You'll need to show investors you’ve got an investable business with huge potential to scale, a strong plan for growth, and a team which can execute.
To be successful, you must be able to articulate your business plan, know how investors will assess the opportunity and learn how to strengthen your proposal.
Step 2: Commercials
It will be critical to demonstrate well-thought-through financial projections and an attractive investment deal to potential investors.
That means building strong financial forecasts, working out how much investment to raise, determining your company valuation, and structuring your investment deal well.
Step 3: Communication
When fundraising, you'll have to explain the opportunity to investors clearly and succinctly. That means learning to speak the language of investors, building a compelling investment narrative, developing your pitch deck, and communicating your true value.
Step 4: Connection
You'll need to attract the right investors who'll add real value to your business. So, you'll need to first determine which investors are right for you, then learn how to find and reach out to them, and of course, make sure you run your investment campaign effectively.
Step 5: Commitment
Successful fundraising means running effective investor meetings, and negotiating and closing a great deal.
You'll need to know exactly how to have the most productive investor conversations, close their commitment to backing you and negotiate your deal to build long-term value.
The deal isn't done until you've got the money in the bank!
Your fundraising mindset underpins all these steps, as you need to keep that strong throughout the whole fundraising journey.
It's the extra factor that makes the difference between failure and success on your journey, providing you with bulletproof confidence. You'll need to discover how to keep your mindset strong, stay focused, build resilience, and remain authentic through the fundraising process.
Why must you get all five right – and in the right order?
Following the five steps in the right order is absolutely critical for a number of reasons:
There's no point in spending all your energy connecting with investors and trying to see if they’ll back you if you aren’t able to show them you’ve got a business that’s investable or you don’t have a sensible deal proposal. The value proposition won’t be clear.
You can have an incredible business, with strong and well-based financial projections, but if you’re unable to communicate effectively to potential investors, you’re going to get nowhere. They won’t be able to see the opportunity.
Communicating your proposition with well-crafted outreach messages and a stellar investor presentation is all well and good, but if you’re speaking to the wrong investors, you’re wasting your time. You’ll be knocking on closed doors.
You can do a brilliant job at getting in front of the perfect investor, but if you walk into that meeting and don’t know how to handle yourself, can’t communicate the opportunity or don’t have a clue how to get the best deal, you’ll struggle. You won’t get an offer, or you’ll sign a poor deal that won’t benefit you in the long term.
Fundraising is something you may end up doing time and again as you build and grow your start-up: it’s a key part of your role as a founder and entrepreneurial leader, so empowering yourself with the strategy, skills and support to be successful in raising investment is absolutely critical.