Considering Your Raise A lot of businesses start with a large number. They begin with the complete raise they anticipate to run. Typically this number ranges between $1M and $10M. It’s good to have the big picture in mind. Some companies consider raising it all at once because they want to get the fundraising out of the way. However, one thing to consider is that raising too much money on a round will cost you equity. This may be equity that you don’t have to give up. Keep in mind that your valuation is low at the beginning. It’s best to raise only the funding you need to reach the next milestone, and no more, no less. As you grow the business, your valuation will go up which means you give away less equity. Think about breaking your fundraise into tranches. It will save time and make each fundraise easier. Your milestones In fundraising are specific goals you need to accomplish. When crafting your fundraise story focus on key milestones including those you just hit and those you are striving for. This demonstrates you are making progress. Here are the 4 types of milestones to consider: Team
 – Make sure you are hiring key people that can help you grow the business. Product – This means bringing the product to a new level of completeness. Sales – Strive for achieving sales traction such as reaching $50K MRR. Fundraise 
- Aim for landing a big investor with a specific commitment or investment. While you may not always hit the milestones you planned, you will most likely find success along the way which demonstrates accomplishment to showcase to potential investors.

If you are a startup raising funding, it’s good to have a few key principles you can rely on. Being an entrepreneur and scaling a business is a hard, but it’s supposed to be. You need a complete team to start a business – someone building it and someone selling it. It isn’t a team if everyone is building it and no one is selling it. You’ve got to be all-in. Part-timers need not apply. But remember that sweat equity is table stakes – not valuation metrics. Startups often assume investors want big revenue, but what investors really want is predictable and repeatable revenue. In an early stage company, the revenue is never large. However, if it’s predictable based on recurring revenue, repeat revenue or known lead generation funnels, then you have a growth story to tell the investor. Build and test your funnel so you know it works. That way you can tell a growth story instead of telling the ‘we’re a unicorn’ story – which nobody believes. Don’t expect funding to solve all your problems. Funding should be an enabler that accelerates what you already have going. You’ve heard the saying- if you build it they will come. But things work differently in the startup world. Sell it first, build it second. If you can’t sell it in the first place, there’s no need to build it in the second place. Many startups over-spend on their tech and then then have trouble finding buyers. A better strategy is to sell it and then build out what the customer wants.

When you’re a startup and want to expand, it can be a daunting task to figure out which products to develop. Before you dive in and spend, it’s a good idea to ask yourself “who will pay for this?” It’s important to ask yourself these questions to make sure that your overall cost also matches your sources. If you are working with an existing product that needs an upgrade, your current customers are a great source of payment. It’s important to ask yourself these questions to make sure that your overall cost also matches your sources. If you are working with an existing product that needs an upgrade your current customers are a great source of payment. You can even survey your customers about what their needs are. If you decide you’d like to develop a new product, it’s a good idea to find customers who are willing to prepay. If you can’t find those customers you should reconsider. A lot of startups think that pre-selling a product is difficult to do. In reality, it’s about the same amount of work. You can get a lot of benefits when working with your customers in the product development phase. You get a clear idea of problems that need to be solved and what customers are willing to pay for. It can also give you a slight competitive advantage. Matching product development with customer payments keeps you aligned with the market.

When talking to potential investors for your startup, the first questions you get will invariably involve product validation and market validation. In other words, investors want to know if your product works and if someone will buy it. Investors will need to see evidence of validation before they move into further diligence, so it’s important to be prepared to show product and market validation in your pitch. Beta users are a great way to demonstrate that a product works and has customer interest. In many cases, the product is a website providing some value in the form of data storage or analysis. More than likely, you will get the product up and running—but will someone use it, and more importantly, pay for it? Customers who pre-pay for it check the market validation box. It demonstrates you are solving a real problem. If you don’t have anyone paying for it, then you’ll need to resort to pipeline metrics showing the number of downloads, trials, and pilot programs. While not the same as a paying customer, these metrics can give a leading indicator that customers are likely to buy. It’s also helpful to illustrate the funnel that prospects go through when engaging with your product. This includes lead generation, qualification, closing, trials, pilot tests, and signed customers. Investors will look for a consistent signup percentage on the leads going through your program. While the absolute number of signups may not by high, the repeatability of your model can be compelling to the investor

In raising funding you hear no most of the time. It reminds me of  a saying, “A good salesman never takes ‘no’ for an answer.” I worked as a salesman for several years and saw how others used this statement. It played out in several different ways. The rookie salesman harangues the prospect with the current product and pitch. They reminded me of the door to door salesman who put his foot in the door and wouldn’t let you close it until you bought something.  An experienced sales person didn’t just repeat the offer, instead they changed it up. When you hear no, you can alter the price, product, or promotion. So when an investor says no, you can change the price (the terms of the deal), the product (improve the startup with more sales, better team, etc), or the promotion (reposition the deal from say an ed-tech deal to an impact deal). The foot in the door almost never worked for the salesman, and repeating your investment offering will almost never work for on an investor who doesn’t buy into it. Make a change to what you are offering and see what happens. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

TEN Capital is not a broker/dealer but rather a Funding as a Service program. Here at TEN, we help startups raise their own funding rather than raising funding for them. Other groups such as broker/dealers (which requires a license) raise money for startups. TEN Capital is a good fit if you want to raise your own funding a lower cost of funds raised to control your raise including the terms to decide who you want as investors Broker/Dealers are a good fit if you you don’t have time to raise the funds you don’t want to deal with the details of the fundraise such as negotiating the terms want to have someone else raise the funds for you Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies