Fundamentals of Capital Raising
Our monthly Booster Masterclass took place at Launch Pad’s Incubator space in Parramatta on the of topic examining the essentials of capital raising for startups.
Over the two-hour event, attendees listened to our Chief Entrepreneur in Residence, Jamie Pride discuss his personal experience as a startup raising capital and revealed his insider tricks on maximising the process of capital raising – one that can be a lengthy process but worth the hard work if done correctly!
The masterclass kicked off with Jamie introducing attendees into the world of capital, with it being identified as the oxygen of a business. He also indicated that if you’re an early-stage startup, the process of capital raising is extremely distracting and that if it is done wrong, it could ultimately contribute to higher risks of startup failure.
It is the ultimate mission for a startup interested in raising capital or to find product market fit before your startup hits zero. However, this is considered to be an ongoing balancing act, where you must know much capital to raise and when.
Jamie drew on a simple chart, for reference. This chart serves to be a key indication of;
Capital Raising can be a Time-Suck
Whilst raising capital allows your startup to scale quickly and can signify credibility from the market, this can be a time-suck. Jamie went on further to explain that raising capital in a best-case scenario can take a minimum of 3 months.
Being able to maximise time to your advantage and be proactive to changes in such scenarios minimises your desperation as a startup owner and can improve your capital terms from investors.
Pitching Efforts for Capital Raising
The session also discussed pitching efforts when asking for capital. Jamie stated that founders tend to shy away from talking about the death of their startup.
However, confidence within your pitch is a critical skill to wowing potential investors (check out more in our Pitching Ideas With Confidence Blog).
If pitching for capital does not go entirely well, Jamie gave three insider tips and actions to participants on ways they can still get something that’s not capital;
Asking for specific feedback in these scenarios can go a long way to improving your capital raising efforts as well as the desirability of your startup in the long run.
As the event was wrapping up, Jamie discussed a really valuable point.
- Preparation is key. Capital is won in the preparation phase. Ensuring both accounts and businesses are in order, appointing good advisors and researching the capital raising landscape is critical to setting yourself up for future success.
- Priming the pump. Be involved in investor meetings early on before you consider raising capital. This enables you to climatise, receive feedback and drive interest for your startup in the future.
- Do not let the fear of stopping prevent you from successfully raising capital. Knowing and sticking to time-bounding periods will ensure you are maximising your time efficiently.
Networking continued well after the event, where participants had transformative conversations on the events learning and how they were able to factor them to their potential startup efforts.