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Lessons for Founders from 50+ CrowdInvesting Campaigns (2/4)

6 Core business elements for founders looking to fundraise - connecting all pieces.

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A few weeks ago we've marked the 50th crowd investing campaign launched on SeedBlink (now at 57). Our business analysts have seen more than 1500 startups, of which only 50 have passed the Funding Committee and launched their funding campaign on the platform. From this experience, we have identified some patterns and compiled a consistent set of do's and don'ts when it comes to running an investment campaign. Check the first part here.

Part 2: Know your Business

1. Clarify your vision

Too often entrepreneurs don’t understand the market they are in or realize during the initial stages of startup development that their aspirations lack focus and clarity.

At this stage investors don’t have many things to base their decision on; your vision of how the future will look, and why their investment needs to be part of it is one of the most important things that you need to deliver.

Use existing information from your industry and your audience to bring clarity to your business plans, and define a crystal clear path for the future.

2. Understand the terms and conditions

Similar to how nobody reads those boring terms & conditions pages on websites, sometimes startup founders don’t pay attention to the legal and regulatory requirements.

Many industries are highly regulated or need special approvals because the regulators accept only specific technologies or processes. Fintech, Medicaltech, are just two of them, but there are more.

So, make sure to read and understand the environment in which you plan to build your business and how to calculate and explain your TAM and SAM.

3. Consistency above all

When it comes to achieving growth and market share, raising a round of money leads to more commitments. Build your plan and stick to it. As the startup raises money round after round, the duty of the founders is to keep improving the processes that deliver the results.

4. Define your competitive advantage

It’s easy to throw rocks at other people’s business, but it’s not sustainable at all.

You need a clear competitive strategy to position yourself against competitors in a way that can help your target market to understand why your product is a better solution.

Selling products or solutions that are already on the market, adding just a better user experience is not such a powerful advantage for the customers to make them switch to you.

Those who devise the strategy of a company will have to consider the competitive advantages and choose a position in the market that will bring them the greatest benefit, taking into account the opportunities and threats. In addition, careful analysis might reveal certain gaps that exist between the resources and capabilities of the company and the resources needed to compete more effectively in the market. These gaps will then need to be addressed. Commonly, tech startups need financial resources, a solid sales team, or specific technical skills.

Vlad Sarca, Partner @ Sparking Capital

5. Don’t miss these core elements

Founders looking to raise money have to ensure their business plan matches a few key performance indicators. They play an important role in investment evaluation and can become a strength, if you pay attention and clearly state your past results and goals for the future.

● Growth pillars and high churn rates
● Recurring revenue that showcases any potential of growth
● An experimentation plan for nailing the right pricing structure
● A clear customer acquisition strategy that consolidates the marketing funnel
● A constant feedback loop that would be extracted from the startups’ users
● Growth plan with realistic goals and results
● Customer or partner reviews, showing their satisfaction with your product

6. Make sure to have a scalable model

A fundraising campaign will back your vision and efforts to grow your product. However, you have to make sure that your product has enough traction, serves the right audience, and proves concrete results without investing huge advertising budgets or relying solely on founders’ efforts.

Consider taking a look at these elements before going forward:
● Invest in your team - founders aside, all other team members have a big impact on the business, so they must be aligned with your plan and actions.
● Pick the right technology - build a flexible system that would allow you to adapt as you grow and/or as the market and technologies evolve. ● Adapt your business plan - just as having the right technology, you need to be flexible enough to adjust your objectives and efforts along the way
● Own your development - and protect your business; outsourcing to others makes it only more difficult to manage.

A business is scalable if the model works well as the workload increases or the geography grows. To have this, you need to hire strategically, invest in technology, build trusted partnerships, place strategic importance on marketing, and outsource tactically. Clearly, having a crowd of investors behind you can only be beneficial in this process.”

Carmen Sebe, CEO SeedBlink

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Hey, thanks for reading! That's it for the second part. In the coming days, we will give you some hot recommendations on the marketing side of running an investment round. See below for a taste of what's to come.

Part 3: Marketing tactics - make your campaign rock

Part 4: Investment rounds - from both investor and founder perspectives

By SeedBlink Knowledge

PublishedOctober 20, 2021


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