It is a well-known fact that the journey for any startup starts with an interesting idea, followed by multiple strategies to scale up and grow the idea from a fetus stage to a newborn stage. Entrepreneurs cannot do everything with their own capital and, therefore, look for funding from family and friends or external (and experienced) investors to reach the next stage of their growth cycle. You must have seen this concept in the popular TV show Shark Tank India. The founders pitch their ideas to the established investors (in this case Sharks) with aspirations of winning funds in exchange for equity in their company.
There are multiple strategic and financial factors that come into play when entrepreneurs seek funding from external sources. This includes figuring out the right timing, so as to catch the funding at the right stage of your startup journey; zeroing down to the right amount you’d need to scale up, and understanding the valuation of your company that can help you pitch to the right investors. While on one end start-ups tackle these operational factors, there are also some perception-led factors that contribute to their success in this endeavor.
“In this fast-growing and highly competitive industry, navigating and rising above both internal and external challenges holds paramount importance. It requires regular learning and unlearning to steer through some of the major milestones that define their success story. One such milestone is definitely finding the right partner who can invest in their dream. In the last few years as a startup advisor, I have seen high impetus being given to technology and everything digital. Understanding what the investors want and then giving it to them at the right time is the only success mantra I can recommend to those looking to scale up their business.” Said Jaspreet Bindra, Founder of Digital Matters, an advisory firm in the areas of Digital Transformation, Blockchain, and the Future of Work.
Communications, whether done internally to align the team on the stages and progress of the funding acquisition process, or to the external stakeholders historically has proven to play a pivotal role key towards a faster conversion probability. Those currently holding the unicorn status swear by the positive effects of rolling out positive and targeted conversations in the media to give that extra impetus to the whole fundraising process. They believe that funding is not just a game of numbers but is also heavily influenced by the perception- of the company and the founding team. There’s a lot that can be fixed or solidified with correct and focused communication. For those starting with the fundraising process, the below-mentioned focus areas will help them rethink their approach to the entire process.
A positive image in the industry can help get the start-ups their foot in the right and more importantly credible doors. Not just the company’s but the founder’s image makes a big difference in the funding evaluation process. This is where PR comes in handy, as through a strategic communication plan, start-ups can help drive positive conversations in the media about the company, its potential in their industry category, and about the founding team, who have built this company to where it is now.
Showing a high demand for the product/service being offered:
Everyone wants to be part of a revolution. With the use of integrated communication tools, the new-age start-ups are not just showcasing their products and offerings but also advertising the demand that their products are generating. This can lead to excitement within the investing community to be a part of a game-changing innovation the company has to offer.
The potential of the industry:
If the industry is booming in the current scheme of things, there is a higher chance of getting the attention of the big VC firms.
With the above factors in check, the start-up team can supplement its pitching process with proof of potential. This helps the investors get a deeper understanding of whether their investment will be able to bear fruit or not.
Read Our More Blog: The year 2021 won the start-up race; how will 2022 fare?