Starting a startup is a process full of challenges, and one of the biggest difficulties faced by entrepreneurs is raising funds. Therefore, having a well-structured plan is crucial to ensure that your company can grow and establish itself in the market.
In the current scenario, investors are more cautious and want to see the true potential of the startup before making a financial investment. It is necessary to prove that your solution effectively addresses a market pain point and has scalability potential. In this way, she needs to acquire the first clients to attract good investors.
In the winter of startups, we haven't seen more investments in an idea just in PDF. It is necessary to already have a minimum viable product and some active customers for the market to believe that your money will bring you returns.
In the meantime, the entrepreneur will have to finance his own venture — this is what we callbootstrapping, or self-financing. When you finance yourself in the early stages of the journey, you show the investment market that you believe so much in your business that you are putting your own money where your mouth is to get started. Of course, this has its downside: good ideas can die due to lack of resources, since not everyone can sustain themselves.
Another common path is to seek resources from friends and family, the so-called FFF investment (friends, family and fools). Although it may be a quick solution, it is important to formalize all agreements and clarify the risks involved, as well as ensure that this investment does not harm yourcaptablewith a participation ofequityvery high.
When a startup needs funding for traction, that is, to acquire more customers and hire sales and marketing teams, the so-called angel investors come in — individuals who invest their own resources in startups in exchange for equity. They are generally interested in early-stage projects with high growth potential but also high risk.
At this point, there is also the possibility of obtaining government-subsidized resources, an excellent source of income without making anyequity. Financing withventure debt, which can be risky since they are resources obtained from loans, are also an option.
From then on, the venture capital market is already keeping an eye on promising startups, those that have been showing good sales results, which can reach thebreak evensoon, and then move on to scalability. This moment occurs when the startup shows a month-to-month growth rate, both in revenue and new customers. It is also when she needs to improve the product, grow the team, and establish governance.
At this stage, venture capital is the best place to seek investment for growth. Another option is to seek companies to sell a stake in exchange for opening doors to their clients, or even to sell your product to them.
From now on, you need to focus on the direction strategy, where you want to take your business and what your path is.exitRaising funds for a startup requires strategy, planning, and a clear understanding of the available options. The important thing is to understand your business needs well and to assess which sources of capital are most suitable for each stage of development. By combining different approaches, it is possible to build a solid financial structure and ensure the sustainable growth of your company.
