Many businesses have failed not because the idea wasn’t a billion-dollar idea but because of funding mistakes that were made out of ignorance. In this video, I will discuss 7 funding mistakes entrepreneurs should avoid.
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It can be difficult to know how to go about seeking startup funding, especially if one is new to the business world. Also, if it’s your first time trying to grow a business, you are more liable to make mistakes.
Never fear, we got you. In this video, we discussed 7 funding mistakes entrepreneurs and startups should avoid when seeking funding to take their idea to the next stage.
Funding Mistakes Entrepreneurs Should Avoid
1. Lacking a Good, Solid Business Plan
If possible, your business plan should also include projections of spending in a few weeks or months. An accurate cash flow analysis is necessary for investors to take you seriously and take a chance on your start-up.
2. Going Into Too Much Detail Too Early
Okay, we just said a good business plan is important to winning over investors. However, too much detail can be a bad thing.
3. Exploring Only a Few Funding Options
It can be overwhelming to sit down and assess all the funding options available to you. Still, it’s a crucial part of your journey. Typical methods of getting funding include getting a bank loan, borrowing from family and friends, or taking out long-time savings.
4. Reaching Out To Investors Without Doing Your Research
The investors or grants you target for funding should mainly be organisations that have funded businesses like yours or complementary businesses. This is because, they will be more likely to support your start-up, as it is familiar. Furthermore, they will have something to offer in the way of mentorship as you begin to grow your business.
5. Asking For Too Much Or Too Little Money
When seeking startup funding, you might be tempted to ask for more money than you need in order to feel comfortable. However, if you actually get the amount you’ve asked for, it is likely that you will start losing your sense of urgency and the drive a business needs to survive.
6. Giving Away Too Much Equity
As you go through several funding rounds, different investors will ask for stakes in your company, but giving away too much will be a mistake. This one of the major funding mistakes tech entrepreneurs make.
7. Getting Swindled
“419-ers” do not discriminate amongst targets. There are cheaters in every industry. If a funding opportunity seems too good to be true, most times, it is.
Though these funding mistakes might not seem that serious, they are very common amongst entrepreneurs. Finding funding is often one of the most difficult parts of founding a business. Improve your chances of reaching your goal by doing some research on the funding process and avoiding these 7 mistakes. Before you know it, your startup will be on its way to success.
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