Fundraising
Fundraising is a challenging job, as the process involves the raising of funds for a specific organization/purpose. Every business needs a successful plan for raising the fund.
MeAccs is known for raising funds. If you are a start-up and looking for funds, then you are in the right place. We understand that fundraising is a complicated process, however, it is a basic need of every start-up to grow. Fundraising can sometimes seem confusing, even scary for few entrepreneurs, however you don’t have to worry leave it on us. It is our specialization, as we have been in the business of raising funds for the past few years.
If you are wondering that it is very easy for us to raise funds for all start-ups in our advisory, then you are wrong. It is a complex process that is handled by our experienced team who have the background of raising funds for many start-ups. “The global estimates are that only 3% of eligible start-ups get shortlisted by the investors for consideration and due diligence“. This makes fundraising task very complicated & difficult, we can’t take up all the start-ups in our kitty, in fact, we have to dig deep and understand the start-up completely before taking in our advisory to ensure maximum success rate. That’s why we understand and listen to your business idea before accepting any assignment.
[Why MeAccs for]
Fundraising
[Fundraising]
Requirements
Raising funds for startups can be a difficult process, as entrepreneurs have to focus on their core activities of the business. Fundraising is a specialized activity that has to be taken care of by experienced investment bankers.
2 Step Process
Before you go for fundraising, you need to ensure that you are ready for raising funds. This could be ensured by following the 2 step process as below:
Step 1
Identify Stage
You will be called a bootstrapped start-up when you put in your own funds. But if you want to raise funds from investors, you should identify the stage of your startup, it could be classified into following phases:
This is the time when you only have an idea in your mind. You may have an existing team to execute this idea. At this stage, you have to prepare a proof of concept (POC) to demonstrate that your idea can be converted into a commodity. In order to raise funds at this stage, you need to have a proven track record so that investors feel comfortable in betting on your idea. You may have an excellent track record of developing such products or you may be a fresh pass-out from one of the best educational institutions. If you don’t have any of the two, then your product must be a great invention that can change the World.
It is the time when you are ready with a product. You have to test the product in a test group of consumers and ask for their feedback/testimonials. It is better that you include experts of the same field so that they can certify that the product is workable. For instance, you may launch an app in the AI + Automobile automation segment, in such cases you should get it used by AI technology experts and Automobile experts. If they feel that the product is good, then it is easy for you to convince potential investors.
It is a stage when you have initial traction for your start-up, you may not have to pay for customers, however, they are using your products/services. For instance, you may have a smartphone app that has 100k downloads and 50k active users. This shows that the consumers are using it, you can monetize it later. You can raise funds at this stage, show the Google analytics to the potential investors to prove your point.
It is important that you are able to sell your product to actual customers and consumers at a price. If they are paying for the products/services offered by you, then it validates the market and proves that you have customers who will buy. This is a good time to raise funds, you can convince the investors that you need money to scale up the operations.
This is the time when your start-up starts growing rapidly. You may not necessarily have revenue, however, at this point of time, you must have huge traction. This is the time when you go for the second/another round of funding as you are assumed to have raised the first round already.
Step 2
Documents Preparation
You have to show certain documents to the investors so that they can evaluate your startup as a potential investment. Generally, the following documents are required by the investors:
You have to pitch your start-up in front of investors. You will convince them to invest in your start-up through this document. This is the first document that they would like to see. It would contain a short description of the problem that you are solving, the market size, your team and member profiles, management capability, risk factors, growth prospects, application of funds, the amount required, KPIs, timeline and history, benefits and unfair advantage. This is the most important document, therefore it has to be prepared with the help of an expert as investors don’t have much time in looking at the pitch decks, they skip and reject if the deck isn’t impressive. At MeAccs, we assist founders by preparing the pitch deck so that you don’t miss any chance of raising funds.
An investor is interested in knowing what is the potential of your growth. How would you project your numbers? This document has to be prepared with the utmost care as wrong numbers will depict a negative picture of the start-ups. The projections should not be undervalued and should not be overvalued, it has to be just right. Our financial experts help Entrepreneurs in preparing the projections. Let us know if you need.
This is the visual representation of your product. You have to demonstrate the investors how your product will look like. You have created a mock product or a working model that depicts how your product/service is going to function.
You need to ask the right amount of funding at the right valuation. This is really tricky as most of the financial experts do the asset-based valuation and they don’t know how to value a start-up. You may end up asking more that will lead to rejection, on the other hand you may end up asking less, which will limit your future potential as you may end up throwing equity. At MeAccs, we provide a valuation basis for the start-up after evaluating the value as per the most appropriate method of start-up valuation.
This is the equity distribution chart that shows who has how much equity at the time of funding and what investors will get, in which proportion after funding. Both pre-money and post-money valuations are taken into consideration while preparing the cap table. At MeAccs, we assist in preparing the right cap table.
Angel Investment is generally an early-stage investment with the huge risk involved for the investors where an angel investor is an Affluent Individual, Investment Networks and Syndicates of Angel Investors who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. The application of the term ‘angel’ to a kind of investor originally came from Broadway Theater, where it was used to describe wealthy individuals who provided money for theatrical productions that would otherwise have had to shut down.
“In 1978, William Wetzel, then a professor at the University of New Hampshire and founder of its Center for Venture Research, completed a pioneering study on how entrepreneurs raised seed capital in the USA, and he began using the term ‘angel’ to describe the investors that supported them as they provided money that was like ‘money from heaven’ for the entrepreneurs.“
MeAccs specialize in raising Angel Investment for Start-ups from individual Angel Investors, Angel Investment Networks and Syndicates of Angel Investors. Please visit the Fundraising section and then download our Fundraising Brochure for details of the fundraising process.
If you are an existing Angel Investor or you are planning to invest in startups as an Angel Investor, then you may please visit this page: Be an Angel Investor