Avoid these mistakes at all costs to ensure you don't miss out on the money.
Starting the process too early
Go pitching only when you have a strategy on how to use the funding. If not, the funds will just sit in the bank with frustrated investors looking for ways to move out. This can severely affect your reputation when you raise funds in the future.
Failing To Network
Investors don't just pop out of thin air. They prefer to invest in people they know, trust and have heard of. So attend networking events and get the word out about your startup.
Raising The Wrong Amount Of Money
While raising less than the required funds can stop your plans, raising too much money can be very expensive. You might have to give more equity than you anticipated or face the pressure of overvaluation when you look to raise more funds in the future.
Not Researching About The Investors
Investors aren't just for money. They bring a lot of experience, network and resources to the table. Wrong investors can lead to conflicting visions and derail your startup's progress.
Giving Up After The First Rejection
Nobody gets funds from the first investor they pitch. Rejections will dishearten you and might question your startup. However, you need to keep on pitching. You need to be persistent!
Investors throw tons of legal documents your way, and you must understand the details of the legal terms used. Not understanding legalities can get you into trouble in the future.
Like a job interview, you wouldn't want to be unprepared for your pitch. Know your customers, market, product, and competition, and have your business plan ready before the meeting.
If you hide facts today, investors may take you to court tomorrow. Be honest and open about your company's details, as investors are your partners, not someone you can fool.