9 Steps to Crush Your Early Stage Startup Fundraise

Do you still remember that specific day, that you came up with this mind blowing concept

August 29, 2021

Do you still remember that specific day, that you came up with this mind blowing concept, that would literally make all of the difference in the world?

It was that aha moment that was the accelerator for you to launch your startup?

And TODAY you have reached the internal conviction and external validation that you would love to attract external investment capital to set your startup up to the races.

But where do you start your successful fundraising journey?

I mean you have probably read all of the books. Zero to one, Lean startup, Blitz Scaling. Maybe even you are deep diving online at Crunchbase, Y-combinator, Forbes and tech crunch.

Or you spend a significant time with our friend Mr Google that leaves you clueless and with more confusion.

All the information that is available online is truly great, but don’t you think it all remains very superficial and doesn’t really give you a practical and proven approach.

Or is it that these authors don’t really want to share the real secrets with you?

Our mind is our biggest enemy.

You have actually no idea how to raise investment. I know you feel insecure and uncomfortable.. You doubt each step along the way and really wonder if your company has what it takes, knowing there are only a handful of dream investors available in the market.

Raising Startup Capital is an emotional rollercoaster. You want it so bad, I know. I can tell you, I have been there many times. But the real truth is our mind is truly our biggest enemy.

I promise you it doesn’t need to be like that. You can change the odds in your favor when you are taking the time and follow a structured process.

Introducing The 9 steps to make it work.

In today’s post, I want to provide you a framework of thinking, a 9 step process, that I hope will help you sooth your mind. Are you ready?

Step 1: Spike up your fundraising knowledge

If you want to avoid getting screwed or getting tossed around the room by investment pro’s, you’ll want to know the exact details that make up the full fundraising process.

To name a few, you can think off:

  • The terms & definitions
  • The funding options available to you
  • The type of investor you are looking for
  • The amount of money you plan to raise
  • Or exploring the investment requirements the investor has.

Your confidence comes with turning information into knowledge. Knowledge into implementation. And implementation into experience.

Before starting your fundraising journey. To make a great impression, you’ll need to know how the process works.

Step 2: Identify a tribe of dream investors

This is self explanatory and perhaps even obvious, but you would want to have at least a list of 70 investors to reach out to. This will grow your chances to successfully hunt for funds significantly.

Just sending out emails to everyone that carries the name tag investor will not help you seal the deal. There are hundreds of thousands of investors out there active in a variety of industries, but there are only a few dozens that make up your club to success.

So take the time to identify what your ideal investor looks like.

Step 3: Work on Spotlighting Your Startup

Alot of early stage startup founders have not yet built up a rolodex packed with investors that are readily available on speed dial.

This requires you to explore alternative methods to grab investor interest. One of them is building up your online authority and exposing yourself as the expert in your niche.

This will lead to the result that as soon as your new investor hits google search that you have sufficient credibility on sight that helps you build a reputation.

To hand you a few ideas. Consider starting a podcast, posting testimonials, or start writing articles and blogs.

Step 4: Build Investor Relationships Early

In our industry the saying goes.

Ask for money, you’ll get advice. Ask for advice and you’ll get the money.

I mean I am sure you can imagine that if you have not yet a relationship with an investor, that dropping a pitchdeck on on his desk, knowing he has already a full stack to review, is not going to differentiate you from the pack and give you that specific competitive edge.

Understand that raising capital is a human game, powered by psychology that leads you to do the right things at the right time.

Investing and spending time connecting with investors at an early stage will help you to warm up your relationships far before you go out for the hunt for funds

Step 5: Get Your Dataroom & Business Fundamentals right

Before you even consider crafting your investor documents, we advise our students in startup dream date capital to first get your business fundamentals right, then set up your dataroom and then build out your pitchdeck..

Pitching to professional investors is an exercise of growing trust.

You’ll start with a vocal pitch, followed up with an investor deck, followed up with an informal due diligence containing crispy questions that will help investors mitigate their risk and an evaluation of your dataroom to explore if everything that you have shared is backed up by facts and data.

Getting your dataroom & business fundamentals right early on, is what matters to cross the finish line.

Watch the full video HERE:


Step 6: Crafting Your Pitch Documents

Once you have analysed your business and feel that you and your startup are equipped with confidence that your opportunity is solid, it is time to translate your opportunity into a set of pitch documents.

The easiest way to approach this is to see your pitch documents as a funnel of information carefully distributed to your investor that helps them move naturally to your offering.

Starting with:

  • Video Pitch
  • Investment Teaser
  • Basic Pitch Deck
  • Comprehensive Pitch Deck
  • Your Financials
  • Your dataroom

Step 7: Reach out & pitch like a pro

A great preparation is half of the work as the saying goes. This couldn’t be more true for raising startup capital.

Only once you have prepared everything in detail, then you want to open up your round by inviting investors to participate.

Pitching like a pro means having the ability to deliver an engaging startup pitch that motivates your investor to take action under 10 minutes.

It requires you to defend your investment thesis in 2-3 meetings, and help your investor to mitigate their risk.

Your goal here is to win hearts, address all pending concerns and get a term sheet or non binding offer in your hand.

Step 8: Nail your Due Diligence, Negotiate terms & select the right financing options

Let’s assume that until this moment the process went super duper fabulous. From the 70 investors that were on your investor list, 5-7 are still actively exploring the opportunity.

Congrats with this milestone. You have come a long way, but we aren’t there yet.

Where we spoke before about your informal due diligence, we arrive now at the stage that the official due diligence will take place.

Or to say it differently this is the moment the lawyers will be knocking your door to turn your company upside down to mitigate all of the potential risk and again double checking your assumptions, words and promises to move your term sheet into a formal investment agreement like a SAFE NOTE, convertible note or shareholders agreement.

The reason we want to have our dataroom ready for review early on in the process is because we want to keep the due diligence process as short as possible. so you don’t lose out on momentum and time and meet their expectations.

Fundraising is a process of speed and aiming to stay two steps ahead of your investor.

Step 9: Stay on top of mind. Always keep on raising.

Once you have completed your fundraising and have the money in the bank, the real work starts aka executing on your plan and delivering on the promises that you have been making.

When your ambitions are high, it’s pretty likely that you’ll be in need for another round of financing in the future.

One of the best tips I can give you is to regularly update your existing and potential investors about your company updates by distributing monthly investment updates.

This will keep your investors hot and interested. It allows you to ask for help and build the necessary trust that you take your startup seriously.

As a bonus you will raise and complete future financing rounds faster and avoid the deadly scenario to run out of cash.

I hope this brief overview provides a taste of how you can be successful too by preparing your fundraising round in time and doing the right things at the right time.

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I have set-up a library of interesting free downloadable content that will help you move the needle. Interested? Go check it out at www.thestartupchef.com.

Make Magic Everyday.

Sven Milder