In Part 1 of our fundraising for startups series, we shared a list of tips and ideas to raise funds for your startup. If you have already read it, you must be aware of the best fundraising options.
Whether you want to raise funds from angel investors, government funding schemes, or startup contests, there are some steps you simply can’t skip. In this blog, Finsmart – trusted for accounting outsourcing in India – will share what’s almost obligatory if you want to raise funds for your startup.
Raise funding for your startup
If you want to capitalize on fundraising opportunities, here are some noteworthy tips and ideas to keep in mind:
#1 Get your books in order
The initial years of a startup’s life are chaotic. While the absence of streamlined processes is critical to its quick growth, the same can pose a challenge when it comes to fundraising. And one of the biggest ones appears in the form of haphazard accounting.
Turns out, an efficient accounting function is critical for successful fundraising. If your books are in order, your potential investors will be able to understand how well your startup can handle debt and expenses. Therefore, keep an eye on books to enable more organized and uninterrupted growth. Since accounting can be challenging and expensive, it makes sense to partner with an outsourced accounting service provider.
Learn more about accounting outsourcing in India
#2 Take care of financial modeling
Getting your books in order isn’t enough. Investors will also ask to look at data and insights from financial modeling. For those who don’t know, financial modeling is the process of looking at company expenses and earnings to make future projections and critical business decisions. Financial modeling is supported by spreadsheets and a lot of data generated during accounting comes in handy while undertaking the same.
Investor decks are rarely prepared without data from financial modeling. Therefore, make sure that projections derived from financial modeling are impressive. Without that, going ahead with fundraising can turn out to be a time drain.
#3 Prepare Yourself
Would you take an interview for a lucrative job without preparation? Of course not. The same is true for fundraising. Investors want to witness what you, as the founder, are capable of. They would be looking for answers to questions like:
- Are you driven enough?
- Do you understand your market deeply?
- Do you have the capability to crunch numbers?
- Do you have a long-term vision?
- Do you have an ace team?
While your accounting and finance team will get the numbers ready, you will need to prepare mentally. Therefore, prepare yourself and your idea before pitching it to the investors for raising funds.
#4 Secure Key Introductions
The secret to pitching success while raising funds for a startup is tapping the investors and sources that are likely to be interested. The chances of success are multiple if you can get an introduction from a trusted friend, partner, or senior executive. Cold calls and unbidden pitches rarely land a funding round.
The more introductions you secure, the greater your chances of closing an investment round. Try to connect with investors with a history of funding startups like you. But before this, make sure you have proof of success. If you don’t have sales, traffic, engagement, leads, followers, subscribers, or pledges to show, the introduction will fall flat on its face.
#5 Capture the Essentials
Investors meet a lot of founders and entrepreneurs every month. Therefore, you need to make an impact within the first minute of your pitch. Explain your core idea and business plan in the first couple of minutes. Touch up on these as well:
- Potential audience
- Target market
- Current market analysis
- Business plan
- Financial milestones
- Expected returns
- Metrics and key performance touchstones
Questions to ask accounting firms before outsourcing for startup
#6 Follow up carefully
You have met some investors and cards have been exchanged. However, this doesn’t mean you should be dropping a call the next day only. Give the investors some time to go through the deck and follow up with additional queries.
In case the call or email doesn’t appear, reach out to your ‘connection’ in the investors’ office to get some info. While doing that, try to be discreet and keep reaching out to more investors. Funding success will come sooner this way.
Funding your startup in 2023
Above are important tips and ideas to keep in mind while preparing for raising funds for a startup in 2023. Keep in mind that the road to fundraising success can be an exhausting one. There will be sharp rejections and roadblocks. Be patient and march on toward your vision. Use your meeting experience to improve the deck and pitch. Pivot if investors have solid reasons to not fund your startup.
For more than a decade now, we have been helping startups get their accounting and financial numbers in order. While lending support of accounting, AR/AP, payroll, and business setup, Finsmart has supported hundreds of startup growth stories.
Got any queries to ask? Send them to firstname.lastname@example.org and have them answered by our experts.
Helpful strategies to expand accounting business
Everything covered about FaaS accounting
A comprehensive guide on making your startup recession-proof
1.7 Employee Retention Strategies for Accounting firms and CPAs
2. Raising Funds for Startup: 5 Tips from Leading Finance Experts (Part 1)
3. Best Payroll Software in India For Small and Midsized Businesses
4. Tally vs. Zoho: Which Accounting Software Wins 2023 in India
Mrs. Dipali Phadke is the Chief Executive Officer of Finsmart Solutions & is the back bone of the company’s operations. A qualified Chartered Accountant with more than 12 years of experience in the field of Accounting, Taxation and Audit.