Don’t run aimlessly behind fundraising
Do you identify with that section of entrepreneurs who have an idea or product or service that you want to monetise and sell but the major roadblock to that plan is funding? Well, here are some industry insights and suggestions for you which can help you see how funding is not the “make it or break it” factor for the success of the company.
According to the apparent perception,
If you ask any wannapreneur what their biggest challenge was, there is a high possibility that they’ll say funding.
Yes, funding is a very important factor in the entire ecosystem but there are ways to smartly handle it. You can check out our article about how to manage your startup without raising funds, but here’s the crux of that argument — Funding is not to be the all in all for your startup. You might be past the idea stage, with a secure investor in the mix, yet not succeed in selling your product to the right market or at the right time. You might have a fantastic cutting edge product but you might be appealing to the wrong investors.
There are, thus, many such aspects other than funding which are equally or even more important in order to sustain your company.
Know your product or service well.
Review it repeatedly, to ensure that it is the best it can be, and ensure that you believe in it. If you yourself are unsure about your offering, it will be near impossible to convince others about the same. Knowing your product better will not only help you with setting up goals which are small, but achievable, it will also help in efficiently allocating funds and preventing unnecessary costs. Bootstrapping your company in the initial stages may help you in reaching the necessary numbers required to pitch a stronger case to potential future investors.
Another thing that helps in sustaining a startup, and which is often overlooked in lieu of preparing the best possible elevator pitch and running behind investors is customer relations. Ensuring you get proper feedback, conducting extensive market research on what the needs of your customer base are is extremely important. Inculcating loyalty and trust with your existing customer base helps in the silent advertisement of the company, which is often free. Making your business and related interactions customer friendly also encourages and is a more or less guarantee of repeat business.
Your initial competition is not with the goliaths. No company topped the charts the second day after their release. It is a long drawn, elaborate process that requires a lot of dedication, hard work, and in many cases a lot of sacrifices as well. Be sure to have a team that believes in the company, is reliable, and has the same value system. It’s okay, and in most cases better to have a small but solid team instead of a huge workforce, who essentially are dead weights. You need a workforce that will stand by you in your highs and will help you learn from and then overcome your lows.
Selling is not a dirty word, and it is not something that is below your station or office. You never know, funding can come from the most unusual of places, so it’s imperative to keep at it, with crowds big and small to ensure that customers are curious enough about your product. Even if funding doesn’t come through from this, it will be a sure-shot way of knowing the air and guessing how your product will be received.
It’s not as if all your woes will magically disappear if you secure the necessary amount of funding. In fact, some experts will argue that external funding, while solving some headaches, gives rise to a few more.
No investor is giving away the money out of sheer goodwill or for fun. Once they become a part of the ecosystem, not only do they hold equity but also introduce the issue of accountability. The investors are bound to have certain expectations with regards to the returns, failing which means to be answerable to them.
Even though a survey by CB Insights reports that it is the second most common reason for startup failure with 29% the top reason for startup failure is lack of market need with a whopping 42%. It is therefore way more important to know the market needs and shape your product or service accordingly, making it future proof, so that one fine day its demand doesn’t crash.
External funding in other words can be described as a loss of autonomy. Having a stake in the company will most definitely lead them to be proactive in the production process, and that might be something that is not wholly enjoyable for you.
Again, even if your funding needs are all sorted, you never know where you may fall short. It may be with talent acquisition, with developing a sustainable business strategy or even with burnout from all work that goes into establishing a company and maintaining customer relations.
Startups can have all the money in the world but still fail to make a mark in the industry of their choice due to a number of faulty cogs in the machinery that is the successful running of the company.
Therefore, don’t run aimlessly behind fundraising, because it in no way is the only marker for the success of your company!