Are you wondering how to raise startup capital through funding rounds? How should your startup be planning?
Startups need capital. Especially those with big visions and hopes to grow fast and disrupt the world. So, how do you get funded?
What Is A Funding Round?
For new aspiring entrepreneurs on the outside may often still get the impression that you just come up with a great idea and pitch deck, and then you ‘get funded’ with millions of dollars and you are off to the races. Maybe you’ll even sell your company to Facebook or Google for billions next year. It can go like that. Most of the time it doesn’t.
In reality, startup capital is typically raised through a series of funding ‘rounds’.
These are individual funding events that are designed to build on each other over time. Despite all of the work that goes into it, fundraising is not a one time deal. The longer you are in business before you sell or go public, the more funding rounds you are likely to raise.
How Often Do Startups Raise Money?
In recent years it has been quite common for startups to raise new funding rounds about every 12 months.
When wondering how to raise startup capital through funding rounds note at each round startups have been aiming to raise enough ‘runway’ to last them 12 to 18 months. With the expectation, they will be able to raise new funding at that time.
Note that, this is really about gaining the capital to finance getting to the next major milestone of business. At which point they should be eligible to attract funding from the next rung up of investors.
This may include funds for hard costs, hiring more talent, marketing, and monthly operating expenses.
Keep in mind that it can easily take six months to close a round from start to finish. So, even if you are bullish on more money coming in, make sure you have a cushion to allow for starting a new campaign, negotiating, due diligence, and getting money in the bank.
See How I Can Help You With Your Fundraising Efforts
- Fundraising Process : get guidance from A to Z.
- Materials : our team creates epic pitch decks and financial models
- Investor Access : connect with the right investors for your business and close them