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TSG Consumer Partners’ Senior Managing Director Hadley Mullin shared his magic steps to effectively raise funding for your startup and foster its expansion onward. He averred that the best time to start fundraising is when you have yet found the necessity of doing so.
When money is the last thing founders look to think about, they tend to make much wiser and more rational calls. In contrast, those who are desperately in need of money tend to make rushy decisions, which result on a less engaging proposal for investors.
Here are Mullin’s strategies:
1. Don’t underestimate the power of networking
It’s just normal to see founders focussing too much on their own business and putting the networking activity to the least priority of their list. This is what Mullin damned. He encouraged entrepreneurs to regard networking as one of most important agenda, as experienced businessmen are fond to establish the next generations.
“They tend to give efficient directions. You need information and perspectives, and experts are the perfect sources,” he mentioned.
2. Start investing on talents from the very beginning
In Mullin’s opinion, a common mistake found among the founders is being reluctant to spend big on talents from the very beginning. They tend to hire less skilled employees to save more and spend less.
Whereas, he claimed that it is fundamental to have a solid team right from the start, thus hiring skilled employees and experts. Yes, it is expensive, but it will smoothen the startup’s pitching activities in the future. “When we evaluate your startup, we will have a view on your team. If you have reputable experts among the team, we’ll be more likely to invest.”
3. Always have a list of potential ideal partners
Running a business requires loads of flowing capital. Don’t hesitate, as Mullin ensured that there are countless money and selection of investors out there today.
Mullin suggested that finding investors is not enough. It’s much better to include them to the team as board members to create a solid bond, making them willing to share their time, skills, and knowledge. Thus, he is of the belief that it’s wiser to approach investors who have certain expertise.
According to him, managing the funding is much more challenging than obtaining it. Hence, he suggested that to find investors who share the same vision with you and are willing to get involved in the startup’s operational activities would be really priceless.
This article originally appeared on e27, a Burn Media publishing partner. Image by 401(K) 2012 via Flickr.