Funding can be a painful process that distracts the management team from growing their business. However, getting the right funding in place can actually help your business grow quicker and more successfully than if you didn’t raise any funding at all.
It’s important to view funding as part of your long-term strategy, and not a quick fix…
This also means considering how the right investor can add value to your company. Investors can act as a mentor, provide expertise in your industry, and give you access to their network.
Nurturing investor relationships also takes time, and maintaining confidence is essential to a rewarding partnership. Keeping your cap tables accurate and up-to-date equips investors with transparent financial information that captures shares and other investment information.
Continue reading to discover the stages of the funding life-cycle, along with key takeaways to consider when building an effective funding strategy.
Successful funding requires a long-term strategy. Don’t just think about the here and now – consider your company’s future. What type of investor do you need to increase your chance of success – what can they bring to the table? And, where might funding come from in the next 2 to 8 years, and how does that align with your growth objectives? The right investor will typically stay with you through 3 or 4 funding rounds, investing more at every stage.
Most companies require many rounds of funding throughout their lifetime, so seeking investment shouldn’t be approached as a stopgap for a short-term problem. Instead, your funding strategy should focus on the future by establishing and nurturing strong, long-term partnerships with investors.
Mapping out your funding strategy gives you clarity about your company’s goals for potential investors (especially angels and VCs). Having a clear plan helps you understand and identify the right investor for your company, making it easier to know where to focus your attention.
A boring, but critical part of your funding strategy is getting the cap table right. Because most founders don’t think about this ahead of time, mistakes in cap tables very regularly cause issues and delays in funding rounds, and sometimes even cause investors to walk away. From regulatory filings, to share certificates, to correct documentation and tracking of employee share options, it’s too easy for simple errors to cause bigger problems later.
The good news is, it’s easy to get all of this right if you address it early on. Globacap’s platform takes care of your cap table for you, removing a layer of pain, and freeing you to focus 100% on your business growth and funding round success.
A funding strategy is an investment in your business growth to ensure long-term success. Understanding the funding life-cycle allows you to create a strong, stable funding strategy to show investors your business is a credible, trustworthy investment option.
We have a checklist to make sure your business ticks the boxes of today’s investors. Download our free checklist today. For more information on how a cap table can help you manage your shares from the start, click here.
Get in touch to see how we can streamline your fundraising or cap table management.
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