Fundraising Strategies For Solopreneurs: Navigating Challenges and Building Trust

Fundraising strategies for solopreneurs can be more intricate than if you had a co-founder on board. However, more founders now focus on the benefits of building a startup on their own. Freedom with decision-making, avoiding conflicting missions, and accelerated growth are only some of the upsides.

Statistics indicate that 65% of startups fail because of discord and disagreements between founders. On the flip side, you’ll single-handedly navigate the challenges and multiple aspects of the startup. This factor can have its positives when raising capital for the company, but it also has downsides.

As a rule, investors are more likely to back a startup with two or more co-founders than a solopreneur. They tend to perceive the company as lacking adequate skill sets, resources, and accountability.

A single founder bootstrapping can only take the company so far. More than one entrepreneur ensures productivity, lower risk-taking, and high levels of diligence that lower the possibility of errors.

Successful Solopreneurs Who Made It Big

If you look at the success track records of these entrepreneurs, their resilience and determination will impress you.

• Josh Hix had to face rejections 200 times before getting his first funding check. He appeared on Shark Tank and participated in several events to get introductions. However, his closing rate was only 50%. Even so, he managed to raise $90M for this venture and eventually sold it for $300M. He advises upcoming founders to stay dedicated to their mission and vision and rely on data to back the decisions they need to make.
• Anthemos Georgiades got many introductions when establishing his startup. Although he was successful with networking, connecting with investors continued to be challenging; most days, investors would make decisions to pass on his pitch deck within 10 minutes. Today, his startup has raised $90M from top-tier investors.
• Eugenio Pace’s first startup was unsuccessful, but he was determined to start his own venture. The first seed round raised just $25K, but the series D round raised $60M in capital. In all, the company raised $110M from investors like Sapphire Ventures and Bessemer. Eugenio talks about taking rejection in his stride and just appreciating the time investors spent meeting him.
• Eric Ryan took his company from $0 to $100M in sales in just two years, raising $34M for two startups. He started off selling products door to door, and today, Target and other major retail stores are stocking his merchandise.

 

These success stories point to the fact that fundraising strategies for solopreneurs can be successful with careful implementation. Read ahead for detailed information about how to impress investors and get backing for your new venture.

Fundraising Strategies for Solopreneurs – Set the Stage to Impress Investors

The most fundamental of fundraising strategies for solopreneurs is to think like investors and their kind of concept worth backing. For starters, they’ll want to see a recognizable brand name backed by a robust mission statement and vision.

Leverage Free Social Media

A great way to leverage free social media platforms that are ideal for the bootstrapping solopreneur. Build your brand authority even if you have yet to create a product prototype or make your first sale. An authoritative digital presence successfully conveys your business acumen and business goals.

You’ll broadcast the company’s name and mission with robust content to attract consumer interest. Start engaging potential customers, which is a great move for when you start the actual marketing. You’ll also impress investors with social media metrics.

Register the Business Domain Name

Acquiring and registering the business domain name is like readying the digital storefront for the startup. The domain is how customers will associate with the business and build brand recognition and trust. Startups typically don’t have a lot of assets that can act as collateral.

However, digital assets like brand and domain names, trademarks, logos, and slogans are IPs and resources that add value. These assets also indicate your dedication to building the business. Even if the startup fails, liquidating the assets can always help investors recover some of their capital.

Further, subdomains are like digital real estate that you can lease for additional revenue streams. This can be a huge advantage when the business is faltering, and an infusion of cash flow can cover the loss.

Even if you have yet to start manufacturing real products, building a potential revenue source is a great feature. Use it to highlight your pitch deck and attract investor attention.

When picking out a domain name, make sure it describes and gives information about what the business does. The right domain name can build authority and presence within your chosen vertical. It also helps identify the company as a reliable entity.

Domain names have an additional advantage. They impress investors that you’ve taken the time, energy, and effort to build an online presence. Having a digital address along with a slogan, tagline, and keywords raises the founder’s chances of investors as a serious solopreneur. Since domain names come with an email address, communication is streamlined.

Prepare to Face Multiple Rejections

One of the main lessons that stands out from the success stories above is the possibility of rejection. Solopreneurs should be mentally prepared to hear the word “No!” before walking into an investor meeting.

Instead of focusing on what went wrong with the presentation, it makes sense to focus on the next one.

Of course, learning from past errors is always a smart move. Don’t be afraid to ask for feedback from the investors on what you could have done better. Seasoned investors can be excellent mentors to guide you on the mistakes for in-depth evaluation.

Take the time to go over the questions that came up, the interactions you had, and the areas where you faltered.

Each experience should be a lesson to inspire you to get better, and in time, investors will be sure to recognize your determination and dedication. You’ll also build confidence with practice.

Never take the rejection personally; it’s just the pitch or business concept that needs more work. Being prepared for rejection is a good thing. But you should also present the pitch deck with the objective of winning the check. Eyes on the prize always.

Gather All the Information You Can

Research and information are the single most important assets you can gather before starting your fundraising efforts. Be very aware that the capital you raise is the most crucial resource to get the venture off the ground. You’ll also continue raising money to scale the company and ensure its long-term success.

So, start by gaining all the possible data about every aspect of your business idea. Since you’ll make all the decisions, this data will not only guide you in the right direction. But also help fortify the pitch deck. Investors need to see actual numbers for the pitch to be credible.

While on the subject of gathering information, put together a list of targeted investors. You’ll have a higher success rate if you concentrate your energies on a dedicated group of investors. Do your due diligence and find investors that operate within your particular vertical.

Also, research the projects they have backed previously. Look for their approval criteria and usual terms and conditions, crucial–fundraising strategies for solopreneurs. For instance, if yours is a mission-driven startup, you could reach out to family offices with philanthropic objectives.

Then again, if you’re building a tech-based company, you might want to look for angel investors who are also veteran founders. Entrepreneurs who have successfully built and exited companies could be willing to not only back your startup. But also provide valuable mentoring and industry-specific expertise.

Keep in mind that in fundraising, storytelling is everything. In this regard, for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.

Demonstrate Traction with Statistics

Being a solopreneur of a new startup already indicates two downsides before you start presenting the pitch deck. You’ll need to make up with impressive statistics that demonstrate traction quickly.

The objective is to indicate market interest in your brand. And that customers need the product or service.

Gather these numbers by giving customers the first few products or MVPs and recording their reactions and feedback. This feedback will help you test, refine, and approve the product before you start adding other features.

Customer reviews also indicate that the products have a real market. Interest in the MVP indicates the potential for substantial sales once you start adding peripherals and advertising them aggressively. Don’t forget to build a social presence side-by-side.

Followers and likes on social media platforms are also traction indicators that can impress investors. You’ll need these numbers if you’re pitching for seed funding and have yet to build the prototype.

Partner with Credible Mentors

Partnering with credible and authoritative mentors is one of the critical fundraising strategies for solopreneurs. Look for entrepreneurs, professionals, executives, and advisors with successful track records. These individuals can provide you with valuable insights into building the startup.

Most importantly, you can get tips for raising funding and building an extensive network of potential investors. Leverage their experience when making difficult decisions in the initial days as a budding solopreneur. Partnering with reputable figures in the industry can prove to be a crucial advantage.

Investors are likely to view your pitch more favorably because of the company’s association with the renowned entity.

Even as you’re reading about how solopreneurs can raise funding, you’ll also want to learn about some essential dos and don’ts when creating a pitch deck. Check out this video, where I have explained in detail all the information you should have.

Key Considerations When Fundraising for Solopreneurs

Solopreneurs setting out to look for investor backing should keep these crucial considerations in mind.

• Be cautious when sharing information with investors. Make sure to secure the Intellectual Property and business secrets in the pitch. While demonstrating the concept is critical for attracting investor interest, you also risk it getting shared with competitors. You’ll use virtual data rooms to share statistics and vital information since getting viewers to sign NDAs might not work well.
• Building a company typically involves compliance with several regulatory authorities. Before you dive into raising capital, it’s advisable to research the regulations pertaining to your startup and vertical. Get started with licensing and permits early on and display them in the pitch. This documentation adds federal credibility that investors will appreciate.
• Always remember that each fundraising event is not going to be the last. Sometimes, you may have to settle for a few unfavorable terms just to get money in the bank. While accepting them may seem like a good idea at that point, focus on the long-term impact on the company. Future fundraising drives and how potential investors may view the terms as an impediment.
• Solopreneurs managing every aspect of company management should be aware that raising funding is a time-intensive task. You may find that reaching out to investors is taking up all your energy and bandwidth. Running the day-to-day operations could become challenging. So, work out a game plan in advance on how to maintain a balance with time management.
• Hiring a team is a good strategy, even if you wish to be a solopreneur. You can delegate tasks to free up your time for other important aspects. It also indicates your willingness to invest in top-notch talent and skill sets to drive the company forward. Investors are sure to appreciate that.

Post-Fundraising Strategies for Solopreneurs

Before accepting the term sheet, you’ll consult a legal expert working in the startup sphere. Make sure you understand the terms and conditions before signing the deal. Once the money is in the bank, leverage advisor expertise to manage the resources and money you now have available.

It’s advisable to track your spending with efficient management and documentation. That’s how you’ll indicate business acumen to current and future investors.

You’ll also demonstrate the effective use of the resources placed at your disposal. Being responsible and grounded will set the stage for funding drives down the line.

Building a business from the ground up as a solopreneur will come with multiple challenges. The primary challenge is always the lack of resources, financial and non-financial. Preparing to meet the challenges of building trust among investors is a good starting point.

The tips above will help you with crucial information about what to expect and how to gain credibility for the venture.

You may find our free library of business templates interesting as well. There, you will find every single template you will need when building and scaling your business completely for free. See it here.