A common mistake entrepreneurs make is that they start quite late when it comes to funding. Most of the time, they put all their efforts into creating prototypes or setting up their business while thinking only a little about getting funding from the right investor. The bitter reality is that it never works that way.

As an entrepreneur, you cannot spend months developing a prototype and wake up suddenly to realize that it is time to raise funds for the business and see the cash flowing in. To be precise, you will require networking in the finance community while creating your business to bag the right funding source.

Here are a few proven steps you can follow:

1. Know Your Investors

Before you start searching for an investor, it is important to understand who can be the right investor in your industry. Take account of the amount you want to raise. See if you would use an accelerator. Also, check whether you are seeking institutional or angel investors.

Before asking for funding, identify the space you operate in. If you cannot, you may need to conduct research and communicate with as many professionals as possible to find that.

2. Maintain a Status Record

Once you have found the most suitable investors according to your industry and business types, you should maintain a record to monitor them. The record should ideally include lists of the investors, the point of contact, similar organisations they have funded earlier, and any important notes from the calls.

As you will be attending loads of meetings and taking part in countless conversations, you will require a way to stay updated with everything and a status record to remain organised. This will help you easily track where you left it with the potential investor, what information you need to share within your network or who you have to follow up with.

3. Capitalise on Your Network

A warm introduction to your potential investors is always better than a cold one. Take advantage of your network to get warm introductions. Usually, a network revolves around the following three things:

The academic institutions you have attended – alumni network or business community

Professional career – people you have worked with at different organisations

Your friends and peers – They may be working in the finance industry or know someone who works in the same sector.

Develop a list of such people in these networks who can directly or indirectly act as your bridge to the finance world. Next, think of ways to reach out to them.

If you want to approach someone at “XYZ” finance company, check if someone from your school, college or university works there. See if someone in your network knows anyone at the company.

4. Develop Your Unique Quick Pitch

No matter how warm your intro is, sometimes people are less likely to invest too much time going through your pitch word by word. Highly occupied professionals don’t have time to reply to all emails daily.

Therefore, if they like what you have and want to share your pitch deck with their network, ensure your pitch has no schoolboy error’s that can cost you a valuable opportunity connecting to the right people.

Try keeping it crisp, catchy and easy to send. Don’t expect anyone to create your pitch, review your presentation or assist you in understanding your unique value prepositions. It is your job to keep it simple and easy for the others who are ready to do you a favour or share your pitch.

5. Be Ready to Hear “No”

While attempting to raise funds, prepare yourself in advance to hear a lot of ‘no’s. Meet 100 investors and it’s very much possible that you will hear ‘no’ from more than 90% of them. The remaining 10% or so could be ‘maybe’s and a minority could say ‘yes’ to exploring further.

For entrepreneurs, it won’t be easy because your business is like your baby and you’ve put a lot of efforts into seeing it grow and flourish. You will find people telling you your idea is not enough or does not have the potential to turn into something big.

This shouldn’t deter you from working towards your goals. An example I like is AirBnB who were knocked back by investors and a lot of Silicone Valley, but the founders were relentless in finding the right investors along with the investment needed.

6. Understand the Whole Process

Fundraising is not an overnight process. It may take weeks or months to meet the right investors. This may require investing a major part of your time you would normally dedicate to running your business.

You will be arranging meetings, meeting investors in person and following up with them afterwards. It can feel like you have a second job along with managing other aspects of your start-up. Once you have raised funds successfully it can get easier, and you’ll know what the exact process is if you must ever go at it again.

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