Raise startup capital with more data to funders, investors, and stakeholdersMarch 7, 2021
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When you are in startup of a tech, production, or service company it can be a struggle in the early days (years). It can involve an unspeakable volume of sweat equity hours, and sometimes an incredible investment of personal capital. You could be even paying everyone but yourself. But as things come together, you release your most viable product, and you fervently hope that your product will stick a little in the market, or maybe even a lot.
When it’s time to grow through investment
Sometimes after a few years of blood, sweat, and tears, you do have something that is sticky, shiny, clever, or perpetually smells like fresh baked chocolate chip cookies. Whatever it is that smells so good may need a lot more capital than you have to scale to full potential. And then you need to speak with, and impress, investors.
Outside of bank and family money there are Angels, Venture Capitalists, Subsidized Loan Programs, and Government Grants. Depending on your company’s product and status, you could very well engage all of these groups over time. But, they all demand a compelling pitch to mitigate their personal fear of risk. Therefore, you will need to convey your market confidence in a pitch.
Often investment pitches go like:
- State of the pain / the practical costs;
- Our clever solution;
- The cost of our solution vs cost of the pain;
- How much we need / what equity we are willing to give up for it;
- How we are going to spend your invested money;
Between 5 and 6 is where success lives and dies.
Regardless of your business type, investors demand a plan with milestones and KPIs for your odyssey towards scaling up. Amongst those KPIs may be reporting the time-tracking of skilled labour toward deliverables within a project, and ultimately shipping.
Giving your stakeholders constant access to your progress of their investment through live charts and reports in chat streams may be the differentiator in a group’s willingness to invest in your company. Even more importantly, it may be the tipping point for their interest to reinvest, or help you build your Series A, B, or C rounds.
Pivot with your investor
What is it they say about best laid plans? Right….No matter how solid your plan is, strategic pivots happen, and they are sometimes very necessary. It can be awkward for a founder, having taken investment from a 3rd party, to head off to do something that was not in the original battle plans. Founders can feel an uncomfortable need to explain themselves (maybe in fear) to investors for major changes in direction.
The transparency of preemptively informing your stakeholder, through constant access to live data, can make that conversation far smoother. Providing your investor with direct access to your team’s productivity metrics can reduce the need for in-depth explanation. Your investor is already up to speed through the MS Teams chat you set them up with, routinely checking in on your successes, challenges, and misses. Transparency in your company’s progress is invaluable considering most private stakeholders can’t really do much more than invest, hope, pray, and follow up in 6-12 months. Giving that access to live data could be game changing for the relationship with your investors.