If you study history closely, you’ll learn that some of the biggest things to ever happen in business are born out of tragedies. To put it into perspective, did you know that Uber, Airbnb, Slack, and WhatsApp were all conceived right after the 2008 global financial crisis?
What the world is going through right now is terrifying, and there is no denying that. Still, visionaries can choose to channel their energies into being ambitious and putting their creative vigor to work. The era we’re experiencing now may be uncertain, but it’s still very much an opportune moment to launch a startup.
But how exactly will that look like today?
To say that it is hard to raise capital in today’s context is an understatement, but with thorough market research and the drive to practice grit and be flexible, you can still move forward, no matter how slow.
Here are practical tips for upcoming and seasoned startup founders who intend to fundraise in the coming year.
Be ridiculously meticulous with your priority list.
Lots of products and services have had to take the backseat now that a pandemic is in play. Always ask yourself what makes sense at present.
How have global events altered your selling proposition? Is the market need for whatever it is you have to commodify still as loud and urgent? Do your products bridge the same necessary gaps? How has the shift to digital affected your services? What changes do you need to consider in terms of pricing, distribution, and marketing?
Knowing the honest answer to each question helps you better understand what you should and shouldn’t prioritize. A pandemic will decrease certain market demands and behaviors. Learn to make the necessary adjustments to supplement your target audience.
For instance, Athena Security, a tech company that enables CCTV cameras to detect explosive weaponry, now uses the same technology to build thermal cameras to see people with fevers in real-time. The goal isn’t just to keep making sales. It’s to remain relevant and helpful to keep meeting market needs and requirements.
Understand how your investors think.
Investors come in many shapes and styles. Others will be a tad conservative with shelling out cash, while some will brave the open looking for opportunities to grow their bank accounts. If you’re about to meet an investor, find out which type he is among the two. If the engagement is with venture capital, determine the fund’s launch, so you know where they are in their monetary timeline. On the other hand, Younger funds will most likely keep wanting to invest in a time like this.
Whatever the background, most investors will want to reduce their risk by investing in more established enterprises. This is because their road to profitability will often be more straightforward for better-known brands. Lastly, only agree to meet up with investors you know are interested in what you have to offer.
Work like a camel.
Unlike most animals, camels can last for weeks on end without water or food. They’re some of the strongest creatures that walk the earth today in that they’ll be able to run fast when needed despite a stunning lack of good nutrition. Of course, that’s not to say that you shouldn’t eat. The point is to be self-aware and fight only in areas where needed and applicable.
In crises like what we’re going through now, the camel mentality is warranted. Most startups carry enthusiastic visions with massive numbers and huge plans. And although this kind of spirit shouldn’t be changed, a health scare should be reason enough to be cash-flow sensitive. If needed, go back to the drawing board and establish realistic business goals. Practice Lean startup principles if you still don’t and keep operational budget expenses reasonable.
Investors don’t only look at how promising your ideas are. They also consider how great you are with handling finances.
Transparency is key.
It doesn’t matter if you already have an investor or are still about to meet one. It’s crucial that you’re always transparent about the current status of your startup. Where exactly are you in the startup stage? What’s had to change in the way you do operations? What are your updated sales projections? Investors have to be acquainted with every nook and cranny of your startup story and journey.
The better informed they are, the easier it will be to communicate what you need. Naturally, it also helps if you explain how you’ve performed and addressed present concerns to help gauge how you work and what your values are.
Acknowledge your mentors.
No matter where you are in the startup journey, it’s vital that you have an advisory board to consult for help. Having tenured entrepreneurs to turn to for advice and direction is crucial in moving forward with ease and confidence. This also allows investors to understand better the theories you subscribe to and the leadership support system you have for you.
Keeping a network of veterans will only keep benefiting you, so never be too proud to ask for advice or help.
Do you have startup ideas you’d like to pursue? Talk to us, and let’s make it happen!