Your startup is hungry! It needs cash for product development, marketing and building the team. You’re probably hungry too. You see the opportunity. You have a vision for growing your business but it won’t even make the (metaphorical) oven – let alone get cooked – if you don’t succeed in raising investment for your startup.
Raising investment for a startup is like baking a cake.
Gather the ingredients
First you will want to gather together all the ingredients that are needed for successfully raising investment. What does the business do? What evidence supports this? What have you already achieved in the business? You will also need to tell the story of how your business grows using a compelling financial forecast. Investors like to know what they get in return for their investment so you will need to value your startup too.
Craft the recipe
Ingredients in themselves are not enough. You need to put them together in such a way that potential investors can see the opportunity and are excited about it as you are. You need a recipe.
Bake the cake
No one likes raw egg in their cake! You have to cook a cake for the right length of time. It’s the same with investors, they don’t back ideas or hunches. They need to see that business is “cooked”. Investors call this “traction”. It’s how you demonstrate what the business has already achieved and prove this is more than a hunch.
Conduct taste test on the recipe
Different people like different cakes. Do you prefer chocolate cake or fruit cake?
Different investors like different deals for different reasons but, just as most cakes have four key ingredients (flour, sugar, butter and eggs), so investors look for four main ingredients:
- Opportunity – what’s the problem your startup solves for customers? How big is the market?
- Team – who is behind the startup? Can they deliver on the market opportunity?
- Traction – how far has the business got to becoming a reality?
- Deal – what is on offer in exchange for investment? Is this fair and realistic?
Once you are happy you have built a compelling narrative around these basic elements, check others agree with you by conducting “taste tests”. Speak to trusted advisors, other founders who have raised investment and – when you feel ready – potential investors. Are they excited by what is on offer? Is your “cake” cooked to perfection?
Ice the cake
No one likes a “soggy bottom” to their cake – and you can expect investors to look beyond the icing. Investors will do their due diligence. Metaphorically, this means investors will prod and poke your cake as if they were judges at a bake-off. You can expect them to test your product, develop their own view of the market opportunity, interrogate your business model and financial forecast and get to know your startup team – and that’s before you get into the nitty gritty of valuation and term sheet.
Offer investors a slice
Raising investment doesn’t happen overnight. You need to get out there, have lots of “cups of tea” with potential investors and show off your “cake”. You will want to work your network, pitch at investor events and get introductions to investors in order to find the investors who want a slice of what’s on offer.
Will you share your cake?
Once you have a queue of investors lined up to take a slice of your delicious “cake”, you’re in a position to choose who you’d like to share the cake with. Consider what each potential investor brings to the conversation. Who can make the biggest difference in your startup based on their skills, experience or contact book? It’s not just about the cash. Who do you want with you for the journey?
Don’t forget the washing up!
Baking isn’t finished until you’ve washed up and put everything back in the kitchen cupboards. It’s the same with raising investment for a startup. The deal isn’t done until the money is in the bank. There are term sheets to agree and valuations to negotiate.
As easy as pie?
Perhaps, baking a cake isn’t quite as easy as it first seems! So much can go wrong in the mix or the cooking. Raising investment for a startup is similar. It’s a process – and requires a chemical reaction – just like baking. It takes time to perfect. You may need to practise and improve to avoid that “soggy bottom” feeling. You can also have fun – in the making and eating of your “cake”. When you understand the process, and surround yourself with people who can support you on the journey, you can settle into enjoying the all those cups of tea with potential investors and raising investment for your startup.
Find out whether your startup is ready to raise investment by taking the Startup Investment Score card
For the full recipe on what investors look for in a “cake”, read 7 Essentials that unlock startup equity investment
It’s funny the things you remember when take time to think back! Hatty Fawcett was recently interviewed by John Cassidy-Rice and this reminded me her that she has been creating businesses and raising money since she was eight. She got distracted for a few years, but now she is back doing what she loves – helping startups to grow through equity investment. The podcast reveals all…
Powered by RedCircle
Lack of investment is one of the biggest barriers to startup growth. Now more than ever. If you have developed your product, launched your business and want to understand your funding options booking a Funding Clinic is a good first step.
What is a Funding Clinic?
A Funding Clinic is an opportunity for you discuss your investment
requirement in an informal but focused 1-2-1 with startup funding expert, Hatty Fawcett. A Funding Clinic will demystify the process of raising early-stage investment and outline your options.
Each clinic lasts 30 minutes and, after an initial discussion about what
your business has achieved to date, will provide practical,
tailored advice on the funding options open to your startup. You can
expect frank, no-nonsense advice which gives you a clear, honest picture of your funding options and what you need to prepare to raise investment. You will leave with clarity about your next steps to unlock investment.
Funding Clinics are conducted via Zoom video conferencing. All you need is
an internet connection and a laptop/computer with a webcam and microphone to take part.
Who are Funding Clinics for?
Funding Clinics are designed to support startups and early-stage businesses who have launched their business and developed at least one product. They are most suited to startups looking to raise between £75,000 and £1 million of seed (or pre-seed) funding. It may well be the first time you have raised investment – that doesn’t matter.
Typically, the founders Hatty Fawcett works with are aged between 40 and 60. About 60% have had a successful professional career but have left corporate life to create their startup, a further 25% are serial entrepreneurs.
Scroll to the bottom of this page to book your Funding Clinic.
What people say about Funding Clinics
“If you are a startup needing advice on virtually any level of the
business, Hatty is the person to talk to. She clearly has a wealth of knowledge
spanning from the basics of starting a business, building and articulating a
value proposition, through to raising investment for your startup. I started
having conversations with Hatty on her Funding Clinic and found her to be both incisive and attentive. People who have real experience in fundraising – and are actually good at it and willing to share in their experience – are hard to come by, and Hatty is one one them. Moreover she is a thoroughly pleasant human being.” Manish Patel, Interim CEO at Jiva.ai
“I spoke in detail about funding options and Hatty put us in
contact with several useful organisations. I would recommend Hatty’s
expertise to anyone who has a start up idea or a fully functioning
business.” Robin Dolton
“Hatty is a true professional and a breath of fresh air in this
sector. I felt very comfortable in sharing my new business app idea with Hatty, and it was inspiring to receive external validation from an expert like Hatty. Hatty’s advice helped spur me on to take the next steps in realising my
idea.” Valerie Lothian
“Hatty gave me clear, concise and invaluable advice on how to
improve my e-commerce presence and grow my business.” Becky Lewis
Booking your Funding Clinic
Funding Clinics are free and in heavy demand. Funding Clinics must be pre-booked (via Calendly). Once booked, please make every effort to attend. If exceptional circumstances occur and you can’t attend please use the Calendly link to either re-schedule or cancel the Funding Clinic (or email Hatty) as soon as you know you can’t attend. This allows your Funding Clinic to be re-allocated to someone on the waiting list.
After booking your appointment, you will receive a reminder email with a Zoom link. You will also be given the opportunity to complete an online assessment which gives you a snapshot of how an investor sees your business, and provides pointers on areas you could improve your investor readiness.
If your internet browser does not display the booking form, click here to be re-direct to the Calendly booking page.
If you require more information about Funding Clinics, email Hatty at firstname.lastname@example.org
Hatty Fawcett, Regional Manager for Dorset for Angels Den, runs monthly Funding Clinics in Bournemouth and Poole. These clinics are designed to give practical, tailored advice to businesses looking to raise investment of £50K or more.
Angels Den matches growing businesses and entrepreneurs with experienced angel investors to provide the investment and mentoring they need to grow further and succeed.
Upcoming Business Funding Clinics
Poole (9am – 12pm)
If you have a high growth business looking for £50k or more, please call Piers Lawford at Angels Den on 0203 318 0230 or email Hatty at email@example.com, giving a brief introduction to your business, before booking a place on a Funding Clinic.