Getting fundraisers off the ground is an important step for entrepreneurs with brand new business ventures. However, given that many new entrepreneurs don’t have a whole lot of experience with fundraising for businesses, it’s easy to understand why they’d be likely to make certain kinds of mistakes.
Here are some of the fundraising mistakes most commonly made by entrepreneurs:
- Failure to focus on milestones. A lot of inexperienced entrepreneurs will tend to focus on how much money they want to raise rather than focusing on what that money they raise will accomplish. You should be able to dissect your fundraising plan, and say “with X amount of money, I can hit X milestone.” Investors don’t care about the total amount of money you want to make – they care about how much money it takes to get to tangible points and what you can deliver with their money.
- Demanding too much money. You have to realize that investors want to be careful with their money, so if you are an entrepreneur with a new company and no prior history of startup success, they’re going to be wary about giving you a ton of cash right off the bat. Be realistic with the types of funds that you’re looking for, and make sure that you’ve done your due diligence in research to prove that you are worth the reasonable amount of money you’re asking for in an investment.
- Losing momentum with investor meetings. Make sure that you stay in your potential investors’ worlds so that you can maintain momentum. If you spread your meetings out too far, it’s really easy to kill the momentum that you have going. The longer you wait before another meeting with investors to get their decision, the more likely it is that they’ll say no.
- Not building investor networks before the fundraising phase. Don’t think of investors as just being your own personal ATM. You should be doing everything you can to forge relationships with them long before you ever approach them with an investment opportunity. The longer and better an investor knows an entrepreneur, the more likely they are to contribute well to their fundraising efforts.
Have you made any of these mistakes in the past? If so, work with Viral Solutions to learn more about how you can develop more effective fundraising strategies for your small business.
Copyright 2014 Viral Solutions LLC