You’re an ambitious start-up founder ready to take your game-changing product or service to the next level, but don’t have the funds to make it happen. What next?
The days of relying solely on traditional lenders are over. The popularity of crowdfunding has surged in the B2C space since COVID lockdowns forced thousands of businesses online and created opportunities for new businesses to thrive. There are national, state-based, and local government grants to explore. R&D tax incentives. Accelerator and incubator programs are an increasingly popular (and prosperous) avenue for start-ups. Otherwise, you may be keen to pitch for funding from ‘angel’ or venture capitalist (VC) investors.
VCs invested a whopping $1.7 billion into Australian start-ups in 2019. So if you believe your start-up has the potential to blow up, you’ll need to know more about what (and who) investors are looking for, to help maximise your chances of success once you get your foot in the door.
Teamwork makes the dream work
What are your individual and collective backgrounds? Investors are looking for founders they truly believe can make a success of the business, so curate your team with this in mind.
Of course, founders need to share a deep passion for whatever problem it is you’re solving. But it’s also vital that each of you brings the skillsets required to execute the company’s goals, such as:
- Sales; your primary subject matter expert (SME), someone who is adept at articulating (and selling!) your vision.
- Finance; will take control of your budgeting and forecasting, including risk analysis and insights into decisions being made by others and how they may impact the business. Key to your capacity to attract potential investors and raise capital.
- Product manager; capable of overseeing the delivery of your product, from design to build, including ensuring new iterations are in line with your business goals.
- Engineer; key to ensuring your product or service actually solves the problem you’ve identified. Focused on front-end development, will deliver the saleable product, fixing bugs, owning quality assurance, even UX.
Planning your go-to-market (GTM) strategy
When pitching, the most attractive ideas are those that have a clear GTM strategy. As a start-up, working through your GTM you will quickly uncover if you’re chasing the wrong audience, targeting a market that’s over saturated with similar solutions, or launching an unprofitable product.
- Start with your value proposition; what is the problem you are solving?
- What is your target market? How big is it? How saturated is it? What pain points and frustrations are you alleviating for your customers?
- Consider your competition; who already offers what you’re launching? What do they do well/poorly?
- Through which channel/s will you sell or distribute your product or service?
How will your business make money?
Potential investors will mostly be interested in how your business will make money! Ad revenue or a large user base alone isn’t enough. At some point, you’ll need to monetise, which means proving that customers will pay for your product.
When building your GTM strategy you and your team will work through how much customers will pay for what you offer, including how that mentality changes if you add capabilities and what method of payment (and consumption) will make them more inclined to keep buying.
Pitching for and securing funding for your business can feel overwhelming. It doesn’t need to be, especially if you have a viable product. Do your research, surround yourself with the right people, keep an agile mindset, and trust your instincts, and the rest will follow.
