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One of the often underestimated aspects of fundraising revolves around the crucial element of planning. This oversight is significant because, lacking a well-thought-out plan, there's a high probability of pursuing inappropriate funding sources, targeting the wrong investors, or aiming for an inaccurate funding amount.
Establishing a clear roadmap detailing how, when, from whom, and why you intend to raise capital is paramount for ensuring success in your fundraising endeavours.
Regrettably, many founders neglect the pivotal role of planning in a fundraising round. Frequently, they hastily dive into creating a pitch deck, exploring investor databases, and presenting their ideas without a strategic foundation. This inclination is understandable.
This gap in knowledge inspired the development of the FundingHero platform, designed to empower founders with my 6-pillars of fundraising.
The first pillar of the FundingHero framework delves into fundraise planning.
Before you start on this funding journey, brace yourself for the reality of fundraising:
No Guarantees: Success isn't guaranteed in fundraising. Be prepared for rejection and uncertainty.
Time-Consuming: You'll devote a significant chunk of your time to fundraising, often between 60-100%.
Potential Risks: Your fundraising efforts could put your hard-earned progress at risk.
Major Distraction: Fundraising can be a significant distraction, lasting from 6 to 12+ months.
To increase your chances of success, create a robust fundraising plan that outlines your goals, target investors, and pitch perfection. For your plan, consider the following 3 areas which we will look at next:
- Fundraising Strategy
- Fundraising Budget
- Fundraising Timeline
The sequence outlined above is a well-structured approach because it begins with establishing your financial strategy, which, in turn, serves as the foundation for understanding the extent and pace of your funding requirements not just for one round but many should you need them!
This, then, defines the nature and degree of external assistance required, which determines the level of costs involved for your fundraising budget both pre and post raise.
This kind of strategic financial planning then enables you to reverse-engineer your timeline, aligning all the crucial elements of your journey in a more cohesive manner, setting you up for success. Preparation takes time and rushing it will only result in failure and wasting far more time in the long run.
To begin creating your own fundraising plan, you can head over to the FundingHero platform, sign up, and get access for free to Pillar 1.
Our framework is based on 6 pillars of fundraising, an easy to follow guide that helps you speak investor and understand the path to a successful fundraise. We’re giving you the chance to try Pillar 1 for free, so you can get crystal clear on your next raise plan.
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