Fund Raising: Science behind the Art of Raising Capital

Eureka! You get an idea and decide to develop it and go after it to create a business based on the idea. As you grapple with the things like technical feasibility, MVP, implementation, team and skills, it quickly dawns on you how much money is needed immediately and in the near future.

The key ingredient of a business is the funds needed to implement the idea! Yes, funds are like blood supply for the company. And fund raising for a business is an art which entrepreneurs have to learn fast.

Fund raising is a necessary part of the startup journey. Fund raising involves creative elements like storytelling, relationship-building, and persuasion. The startup founders have to master these aspects to be successful in raising capital.

On the other hand, key scientific principles for fundraising are data driven  

(a)  Market research to validate ideas

(b)  Financial modeling and valuation techniques to support projections and decide the target amount to be raised,

(c)  Investor targeting to find the right fit, and

(d)  Pitch deck optimization to communicate effectively.

The more the data, the more scientific the approach, the more risks are managed, the more predictable are the outcomes.

Together, the science and art of fundraising form a winning formula. The startups have to keep getting this balance right at each stage to have a chance at glory.