Will investors fund my startups? Does your startup really have a chance of getting funded?
Whether you are still debating whether fundraising is the right path right now, or you’ve had some rejection and want to know whether it’s worth continuing, these questions will help you evaluate your startup, and improve your game to increase your odds of getting funded. Or you might find it’s time to make a quick pivot to give your vision the best chance of success.
Does Your Founding Team & Board Of Advisors Give Investors Confidence?
Especially when it comes to early-stage startups and funding rounds, a lot is riding on your team. You may not yet have revenues or even a finished product. Even if you do, investors at pre-seed through Series A are mostly looking at the strength of your team.
When thinking about will Investors fund my startup having a strong business idea is great, but there are few truly original ideas. What investors are looking for is the best team to execute.
Investors will be looking to see if you have any track record in successful startups, if you truly have domain experience, are being realistic, how many cofounders you have, and the advisors you’ve brought in. If you have any gaps or weak areas on your team, hire or bring in help that will round things out, and give investors trust in your ability to make your plans happen.
Do You Have Really Big Market Potential?
How big is your industry? How big are your potential gains? What does growth look like in this space over the next few years? This are questions you should ask yourself ahead of thinking the if of will Investors fund my startup.
Billion-dollar companies used to be something really rare and special. They still are great success stories but are far more common than they used to be.
You’re now competing in an ecosystem where other startups are worth tens of billions of dollars. You may end up selling or being acquired much sooner than you planned, but if you want to get funded, you should be aiming for a really big market.
This not only gets investors excited but is the range in which you have to operate if you are going to deliver those super attractive 100x returns.
Break down your market by not only total size, but total addressable market segment you are a good fit for, and a reasonable percentage of market share you can achieve.
Are You Solving A Hair On Fire Problem?
Most businesses that never make it have nice to have products that really aren’t solving an urgent problem. If you’re going to count on people being willing to part with their precious hard-earned dollars, and more importantly, give you the time and attention to spend them with you, then you’ve got to be tackling a serious need.
Are people really searching for a solution to this right now? Will this still be one of their biggest problems in five and 10 years from now? Could this lead investors to fund my startup?
Do You Have Product-Market Fit With Your Target Customers?
You may not have it yet depending on what stage of business you are at, but it is one of the most important and hard to nail factors for startups. Achieving product-market fit is a great selling point for investors. Even if it is still at a modest level.
Securing and proving product-market fit is really about proving people are willing to pay for your solution. Getting a lot of website visits and inquiries from leads is a good sign. Though unless you actually have users, happy feedback and preferably paying customers you may not have proven you’ve got it, yet.
Do You Have A Great Pitch Deck?
You can have everything else right, and have all the right ingredients for startup investors would want to fund, but if you aren’t conveying it well through an effective pitch deck you still won’t get funded.
You have to bring together all of the points here in a cohesive, smooth flowing and easy to understand the deck.
Be careful not to get lost in endlessly tweaking your deck before launching a fundraising campaign. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).
Are You Ready For Rejection?
It can take a lot of rejection to get to a yes. You might be the exception and get a check on your first cold email ask. Many of the most successful entrepreneurs I’ve interviewed on the Dealmakers Podcast say they faced many rejections for their first startup. If you can’t take 50, 200 or 300 no’s in order to get your business funded, then you may not get funded.
The same goes for winning customers. Your sales team may have to hit 25, 100 or 1,000 no’s before they get a sale. Especially in the early days.
Are You Pitching The Right Investors?
Fewer rejections and more checks come from pitching the right investors.
You’ll greatly streamline the process of fundraising and save a lot of time and stress by finding the best fitting investors. This will also make doing business with them on your cap table and board a lot easier later too.
Deeply consider the type of investor you want to be involved in your business. Find those who are looking for opportunities like yours already. Provide them your opportunity.
Do You Have A Good Business Model?
When you are asking will Investors fund my startup, remember there will always be a demand for investments in good businesses. A new a crunch or recession driven by poor startups could make it harder and investors more demanding when they consider funding.
Look at WeWork that recently lost 75% of its valuation, as well as some other recent IPO, fails. Some companies are still losing tens of millions of dollars each quarter. They may have a strategy, but if you focus on building a great business, there will always be a market for your business and people will want to fund you.
Like this information? Get even more from this fundraising training.