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The first 7 mistakes Startups make when raising investment January 2020 © Copyright Spark! Consulting 2020
The first 7 mistakes Startups make when raising investment
January 2020
© Copyright Spark! Consulting 2020
Welcome to our guide on “the first 7 mistakes Startups make when raising investment”
It’s part of our #8weeksinvestorready series – follow us on LinkedIn to find out more
© Copyright Spark! Consulting 2020
Going for Investment too soon
1
Going out for investment before you’re properly prepared will only lead to failure.
If your business isn’t in order, and your documentation isn’t good, you risk burning bridges with potential investors who would otherwise have been interested.
It’s a high price to pay.
© Copyright Spark! Consulting 2020
2
If you go out too late, you risk running out of money, and pitching when you’re desperate is a bad place to be – you might end up having to take investment from someone who isn’t the right investor for you, just to keep the company going.
Money-pressured decisions can come back to bite you
Going for investment too late
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3Not communicating their story well
People engage with stories, and where most good stories have a start, a middle and an end, Startup stories need a problem, a solution and a plan.
An unengaged Investor won’t open their wallet!
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Don’t understand what Investors worry about
4
People don’t buy, or invest, when they have worries and objections.
Raising investment successfully means you need to understand what Investors worry about, and find ways to remove those worries up front, through how you organize your business and how you present your documentation.
Remove worry ‘triggers’ and make it easy for an investor to say Yes
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5
Too many Startups send their decks out to hundreds of people and organisations, with little or no impact.
People invest in relationships, so doing your research and deeply targeting 10-20 investors who specifically invest in your area is much more likely to be successful.
Doing more research and less emailing will save time and effort in the long run!
Target too many people
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6Don’t listen
Too many Startups engage with Investors but don’t listen to what they’re saying.
If a potential Investor is making a point, it’s probably the difference between them investing and not.
Of course, always consider what the investors motivation might be in asking for a change – but the majority will have your best interests at heart!
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Don’t want to pay for key advice and support
7
It’s tempting to try to do it all yourself, especially when money is tight.
However, when it comes to things like protecting your brand, shareholder agreements and due diligence, you might save money short term, but long term you’re increasing your risk – you don’t have the required expertise to know what you’ve missed, and your time is better spent pushing forward on product development and drumming up sales.
© Copyright Spark! Consulting 2020
Thanks for reading!
If you’d like to discuss how we can help you become ‘Investor Ready’ and plan for a successful raise, please get in touch on [email protected] or visit our website to find out more:
http://www.spark-consulting.co.uk
Are You Investor Ready?
© Copyright Spark! Consulting 2020
