One thing will always ensure failure for an otherwise great business idea: being unable to get the money to make it happen. There are plenty of ways to raise funding for your business idea, most notably through pitching investors to receive venture capital and angel capital. But there are plenty of reasons you might want to raise your capital more quickly, and there are many different ways to do that.
Let's explore seven quick strategies you can use to get your funding faster.
1. Go In With a Plan
You already have a business plan. But do you have a fundraising plan? Before you really get started, make a list of potential investors: venture capital firms, angel investors, etc. Do your homework and figure out which ones will be most likely to invest in your particular idea. And this one is important: Don’t simply blanket them all with the same unsolicited proposal.
Cold calling is a good way to get rejected very quickly—and that’s probably not what you were thinking of in terms of speeding up your time frame. Know who you’re approaching and how to approach them, and try to find a referral. Knowing what you’re doing, who you’re approaching, and how you plan to do it will save you a lot of time and rejections.
2. Know What to Expect
How do you believe a venture deal works? What are they looking for, and how can you deliver it? Do you know the process? Do you know the lingo?
If you go into the venture capital game without knowing what to expect, you can easily get swept away—and waste a lot of time learning as you go (and failing because you don’t know). Your best bet is to learn quickly with books and content, like Both Sides of the Table.
3. Get a Mentor
If you’ve never raised startup capital before, it’s easy to get lost, go down the wrong road, or waste a lot of time on things that aren’t as important. Find someone who’s done it before, who knows the ropes, and can guide you through the process.
Jen Lambert, editor in chief and current owner of The Glimpse, had several mentors who helped her get the funding to acquire and start her online magazine. Speaking about her own experiences, she said, “I relied on my mentors a lot initially. They helped me see things I never would have, and they saved me countless hours of research and mistakes.”
4. Ask for Less
So you need a million dollars to make your plan work. You know what’s easier (and faster) to raise than a million dollars? Half a million. Or even $750,000. This may seem mathematically obvious, but there’s actually another reason to keep your target under a million.
There are certain requirements for investors in private and startup companies, to ensure they have the money to lose, if it comes down to it. But if your target goal is less than $1 million, those requirements are relaxed, widening your pool of investors and making it easier to raise the money. If your target is over a million, try to find ways to scale back.
5. Assemble a Good Team
You can’t do this all by yourself. Gather a team together and delegate tasks. The more people you have on board to help you, the faster and more efficient you’ll be at raising the money you need.
6. Spread the Word
The more people know about your endeavor, the faster you’ll be able to raise the money you need. Use social media to spread the word about your startup plan and connect with potential investors.
Facebook and Twitter can be helpful, but LinkedIn in particular has networks specifically geared towards connecting startups with venture capital firms.
7. Consider Crowdfunding
Crowdfunding is becoming an increasingly widespread method of raising funds. Rather than getting money from VCs, take your idea straight to the people you’ll be marketing your company or product to. And rather than enduring a dozen rejections before finding the one group willing to fund your idea, you can raise the money a piece at a time, from donors who are excited about it.
Best of all, you can get the money in just a couple of months or less, and have the potential to make even more beyond your initial goal. Kickstarter and Indiegogo are the two most prevalent crowdfunding sites, though there are others as well, depending on how you want to raise the money and what you’re raising it for.
This might not be the best idea if your target amount is a couple of million. Multiple millions have been raised through crowdfunding before, but only for well-known and heavily supported products like Reading Rainbow and the Veronica Mars movie. However, if your goal is, say, $100,000 or less, crowdfunding might be an easier, faster way of raising it than traditional VC.
There are all sorts of ways to raise money for your business -- and plenty of shortcuts to raise the money more quickly. But the most important thing to remember through all of it is simply to know what you’re doing from start to finish. The better you know your idea, your fundraising strategy, and your investors, the better you’ll be able to get people excited about investing, and the faster you’ll be able to raise the money.