Startup Fundraising 101

Gone are the days where you can get funded based on an idea. In order to secure funding you must establish the feasibility of your idea through proper planning and implementation.

You must have a prototype or a minimum viable product. You should also establish the proof of concept of your business before you qualify for funding. Here are some ground rules you must understand before you start looking for funding.

• Firstly, Not all businesses are fundable – A business must satisfy a certain set of criteria before it qualifies for funding. A business is only fundable from an investor’s point of view if it has a potential to scale up and give exponential returns.

• Secondly, you must remember that funding is not an indicator of success. – Irrespective of the impression that you might get from the news and media. Funding is just a stepping stone. Many businesses around us have grown without any funding. So funding might be a need in some cases, but it’s not an absolute necessity.

• Which brings me to the third point. Your business should be self-sustainable. The primary source of your funds should be your paying customers i.e. your business should generate enough revenues and profits to fund the growth and expansion.
• Only in the case that this is not possible or there is a specific need for additional funds then only you should look for funding.