9 Questions To Ask Before Raising Money | For Startup

A lot of startups in India have entered in the industry either unearthing an entirely new market or through gaps in existing markets or product lines. Although there are various successful startups that are growing rapidly and changing how an existing industry works in the process like Paytm, Redbus, InMobi ,Housing.com, Zivame, AdPushup to name a few. This listing is not only exhaustive but it also serves as an appetizer for delving deep into the world of the Indian startup ecosystem which is the 4th largest on the entire planet. 

Now Days Every Indian Youth Know What is Startup And How It plays an important role in our economy, But There Is One Misconception Among the Youth Who Are thinking to Start There Startup or Even Started. That Misconception is About Raising fund.

We Are not Going To talk about how to raise fund or how to apply for it, But if your thinking to raise fund for your startup or business then :

Few Questions To Ask Before Applying For Funding:-

1. Are You At Right Point To Raise Funding ?

Is your company at right place where you consider to raising money? Your idea should small enough to start today with your own money.
[ No one will give funding by Just listening your idea, there should minimum 15%Plan Existed]
2. If You Don’t Get Funding, How Would you make your business work ?

If you can answer this question, Angels and VCs will be more interested in your business. By demonstrating that you don’t need capital and gaining momentum before you try to raise money, you will become a more attractive investment.
3. How Will the Money You Raise Be Used?

When raising money, you need to put yourself into investors’ shoes. Investors want to know how you will use the money. You need to show them how you will convert cash into growth. Whether the money will be used to make a key hire, ramp up production, or secure intellectual property, they need to see your plan for putting it to use.
4. Do You Want to Keep Total Control of the Business?

Whenever you ask for money, it comes with a lot of expectations. People don’t write checks without making demands. Prepare yourself to either retain full control of your business and possibly not be able to raise as much money or cede some control in order to get a bigger cash infusion.
5.  Do You Want Accountability?

Most entrepreneurs don’t like other people telling them what to do. But venture capitalists want to do just that. They want to work with nimble entrepreneurs who are open to suggestions about their business.
[To Build A Good Relation With Someone, You Have To First Listen ]
6. Have You Done Enough Research About Your Industry?

Don’t waste investors’ time by failing to do your homework. You need to know what your industry looks like before you go out to raise money. It will show potential investors that you are serious and prepared to use their money wisely.
[Do a large scale research of your market and competitors, and think what you will give that they don’t]
7. What Makes Your Business Model Different?

Investors need to understand why your business stands out. Your company needs to be positioned so that it will have a distinct competitive advantage in the marketplace.
[There Should Be Something Special, Which Makes You capable For That Winning ]
8. Have You Done the Math? What Is the Value of Your Company?

The moment you present bad math, investors are going to walk away. They are expecting you to have real projections and to back up your valuation with sound numbers. Know the industry comparisons, and use “comps” (comparable businesses) for multiples of revenue, sales, or other industry-specific metrics.
[Your Company Valuation Should Be Correct And Real In market Respect]
9. Are You Building to Sell?

Investors want to know if they will be able to sell their investment for a solid return in five to seven years. Do you have an exit strategy? Some VCs don’t want to invest in businesses that are built to sell.
[Many investors interested in asking the IRV(Investment Return Value) Before Funding, So You should Have Strategy For That]
Tip: Raising Fund is Not a rocket science, you just need a Tricky mindset and vision.  πŸ˜‰

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