Securing Startup Funding: Make Sure To Answer ‘Who Cares?’
Securing Startup Funding: Make Sure To Answer 'Who Cares?'
For many businesses, success is dependent on raising the capital necessary to fund the business to a point of profitability, and that capital can come from a variety of sources. Funding can originate from many avenues, ranging from traditional bank loans to government grants, accelerator programs, angel investors, and venture capital. Yet, navigating these diverse methods of raising capital can prove complex and daunting, particularly for first-time founders.
In our recent Ways to Fund Your Startup online workshop, we heard from Lucy Lin, Entrepreneur In Residence, Rebecca Wendland, founder turned VC Investor at Folkfore Ventures and Donna Patane, Industry Growth Program Advisor at Department of Industry, Science & Resources discuss the different stages of financing, and different avenues of funding.
Types of Funding for Startup
💸 Bootstrapping: Utilise personal savings or existing company revenue to fund your startup’s operations, offering autonomy and control over finances.
💸 Grants: Access non-dilutive funding for specific projects or research initiatives, often provided by government agencies, foundations, or corporations.
💸 Crowdfunding: Engage a broad audience to contribute funds to your venture in exchange for rewards or equity, leveraging platforms like Birchal, Kickstarter or Indiegogo.
💸 Angel Investors: Secure investment and mentorship from affluent individuals who provide capital and strategic guidance to startups in exchange for an equity stake.
💸 Venture Capital: Tap into institutional funding from venture capital firms, which deploy significant capital into high-growth potential startups in exchange for equity, often at later stages of growth.
Key Attributes for Investment-Readiness
Understanding Investment Stages: Funding for startups progresses through various stages, from seed funding to Series A, Series B, and beyond. Each stage represents a milestone, with different funding sources becoming relevant at different points.
Market Potential: Demonstrating a sizable market opportunity with clear evidence of customer interest is crucial in investors’ eyes.
Feasible Product: A feasible and differentiated product that addresses a significant problem is critical for investor confidence.
Effective Team: A capable and resilient team with strategic thinking, execution prowess, and coachability enhances investment readiness.
Final Takeaway
1) WHO CARES:
“Prioritise building something that resonates deeply with your target audience, investors, and community. Build something that people care about and love. Who cares – to your customers, investors, and community?” – Donna
2) DO YOUR HOMEWORK:
Do not get caught unprepared and speak to investors without thinking it through or knowing who your audience is. There are no excuses for not doing your homework. “Why should investors take the risk if founders are not putting in the effort?” – Bec
Stay tuned for more updates on the Women and Multicultural program: