Launching a new startup can sometimes be as stressful as it is exciting, and one of the chief concerns for most startups is funding. All companies need initial finances to establish and operate their business before they can start funding themselves out of their profits.
Some start-ups are self-funded using personal investment, others use crowdfunding sites, and some may even apply for government grants. Most commonly, however, start-ups will apply for start-up business loans. Applying for funding involves demonstrating to a potential investor that your business is worth their time and money. Here are our tips on how to get initial funding for your start-up.
Have an innovative idea or product
Having an innovative idea or product is one of the best ways to get funding for your startup as you’ll be filling a gap in the market, maybe even one that people didn’t know was there. Some of the best ideas are those that improve everyday life by reducing inconvenience, saving time, or otherwise improving on something people thought couldn’t be changed. You’ll need to do very little ‘selling’ if you already have an innovative idea.
Believe in what you’re selling
When you’re asking anyone for initial funding for your start-up, you’re asking investors to believe in your business, and you can’t get other people to believe if you don’t. If you’re sure your idea or concept is a good one, present it in that light. You may have doubts about the logistics and whether everything will work out but having faith in the core idea behind your proposal will inspire confidence in others too.
Define your value proposition
Your value proposition is the reason why someone should do business with you. Why are you better than your competitors? What are you offering that they aren’t? Your value proposition needs to be clear and concise, identifying all the benefits of your business or product, as well as what pain points it addresses. Your value proposition will be the main thing potential investors remember, so make sure you can define it easily.
Develop the perfect pitch deck
A well-presented pitch deck will be the backbone of any pitch you have to do in order to get initial funding for your start-up. No matter how much you practice your pitch, the real thing will always be slightly different to how you envision it. Your pitch deck, however, can be prepared to perfection and will stay that way. Having a screen with visual cues can remind you of each point in your presentation whilst also giving investors all the information they need to know in a succinct fashion.
Stay open to feedback
When pitching and applying for initial funding, you may get a few knockbacks and this is to be expected. You also may get funding approved with the proviso that you make certain changes to your product or business model. How you deal with this feedback will have a direct impact on your future applications.
Feedback may offer something you hadn’t considered before, and even if you don’t agree with it, reacting badly may come back to haunt you. Whatever the feedback is, make a note of it and revisit it later with a clear head – you may find some value in it.
Keep trying different options
As with staying open to feedback, you should stay open to where you request your funding from. The important thing is getting your business off the ground. Don’t put all your hopes on one pitch or application even if you think it’s the perfect fit. The best course of action is to cast a wide net. It’s much better to have options and if you don’t succeed in an application, try and try again.
Applying for initial funding for your startup can be daunting, but each time you do it, you will get a little better and your pitch will become smoother and more refined. Make sure you know in plain terms what makes your business model great so that you can communicate it to investors. If you have confidence in your idea, and yourself, then so will others.
If you’re a tech startup currently looking for funding, take a look at our guide on how to apply for the SEIS and EIS schemes.