Experienced entrepreneurs know how time-consuming fundraising can be. The ultimate goal is to secure investment efficiently to minimise the time spent on non-core activities and, instead, focus on growing business.
We have shared a list of common mistakes in the effort to improve industry wide start-up fundraising standards. Listed errors have been exceedingly frequent in Nord Sloane's practice over several years.
20 fundraising mistakes to avoid (in alphabetical order):
Continuously changing fundraising strategy
Discontinuing fundraising efforts prior term sheet signature
Disorganised or non-existent data room
Endless amending of the pitch deck to attain perfection
False sense of extreme urgency to pressure investors
Founders giving away majority of ownership
Inability to communicate the opportunity concisely
Inability to define actionable go-to-market
Inadequately planning fundraising timeline and runway
Limited knowledge about competitive landscape
Not carrying out due diligence on investors
Not raising potential red flags in a timely manner
Not taking onboard constructive criticism
Not thinking through possible exit strategies
Overestimating company's growth projections
Poorly researched company valuation methodology
Raising equity investment to pay off outstanding debt (limiting factor)
Slow response time and documents turnaround
Solo founder operation with no support team (limiting factor)
Taking personal offence from investor feedback about opportunity
The list is significantly longer. Consequently, fundraising strategy research and preparation are imperative for a successful raise. Our recommendation is to use your time wisely to prepare to execute a well-coordinated fundraising strategy. Good luck with securing investment!
Reach out to Nord Sloane team if you have any questions or sign up with our events and publications. Website: www.nordsloane.com