Funding your startup is one of, if not the most crucial part of creating the company. While bootstrapping may be ideal for a number of entrepreneurs, it isn’t always possible, meaning they will need to raise money from VCs or Angels in order to get things off the ground. Like anything related to humans, it’s possible for entrepreneurs to jepordise their chances of actually raising funding.
At the recent Techstars-4-A-Day event, which was held at the Rise hub in Cape Town, Alexandra ‘Alex’ Fraser (Silicon Cape) and one of the founders of Yoco, Carl Wazen, gave the audience some tips on raising funding for their startup.
Start thinking about funding now
“Most entrepreneurs don’t start raising funds early enough,” said Fraser. “Give yourself time to raise funds.”
This means that many startups only start looking for funding once the gears are in motion and only give themselves around three months to accomplish the task. It’s a crucial step that should be looked at as soon as possible.
Family, friends, and Angels
Seed and early stage capital are important parts of a startup’s growth. While approaching a VC or bank may not be viable, there are a range of ‘Angel’ options that can be explored.
“Don’t skip the step of raising from friends and family. You need people that have your back and there’s more flexibility in that world,” says Wazen.
“The institutional round is a big milestone for your company. Raising it as late as possible is best.”
Do your homework
Fraser went on to say that entrepreneurs shouldn’t spam VCs for funding with emails and mailing lists….