The four fundamentals of fundraising

Raising capital is often a necessary step to initiate a project. The Hi-Tech market is no exception to the rule, and is particularly time and money consuming (technical solutions research, developments, patents, applications for approval, mounted version, start of production ...) and requires substantial investment even before the project is marketable.

The idea is innovative, it allows to significantly advance a standard or it can even change the world ... without means for transforming the idea into reality, nothing is possible ... The exercise of the fundraiser is to sell his project to a demanding guest, since his job is just to filter the files that have the potential and "sniff nuggets" ...

So, how to manage this fateful period? What is the genesis of a success? What are the key points to lead a project? Without giving a magic formula, we propose, based on our field experiences, reflect on the elements for success of the project and identify what techniques to bring investors to the capital of your company.

Rise in front of his project

The first observation commonly observed is that the entrepreneur is having problems to rise in front of his project. For example, in the hi-tech sector, the project director is, in most cases, the guarantor of the operational solution proposed and he will have a natural tendency to focus all of his communication on the technique. If this criterion is obviously fundamental, a business angel does not set its decision solely on the purely technical aspects. He has, indeed, the need to understand the rational of the project as a whole and to ensure the ability of solutions, teams and more broadly, the model to meet a market specific need.

Lead his communication with the aim of meeting the expectations of investors is already a first step towards success. To do this, it is necessary to prepare a coherent strategy and formalize a tailored action plan.

Develop a solid business plan

The second finding also identified is a business plan that is unstructured whose assumptions are perfectible and often "a la carte". If the business plan is a tool for reflection, it also allows the business angel to gauge the rational of a project and to understand the intentions and the approach of the project leader. Have a clear ambition, or know where you want to go, is a fundamental principle when researching funds.

In its business plan, the entrepreneur must be able to demonstrate that he has set clear objectives in terms of timing, capital requirements and sourcing. It must also demonstrate knowledge of the market and the capacity of its project to be profitable. Until the funds are not paid, nothing is done. It is therefore important to control the variable time and able to anticipate when and how the funds raised will be used but also, what are the prospects for output to the investor.

Have a maturity level appropriate to the market

There is no point embarking on fundraising when the project is not yet complete enough. Too often market hi-tech projects that come to us are still at the prototype stage and presenting features largely uncorrelated from those in the business plan. Being in the "time to market" is a selection criteria for a business angel. So do not rush before being able to show, concretely, that your solution is marketable within a reasonable time and that the steps that still need to be crossed, are completely controlled. The more operational is your project, the more capital investor will be inclined to move forward on your project.

Raising the quality of your presentations

The presentation of your project reflects your understanding of market issues. If it is too technical, it is likely to drown the interlocutor, if it is too commercial, it might be considered slight by the interlocutors. You only have one window of opportunity to attract investors and first impressions are often decisive. It is therefore necessary to provide pragmatic answers to the questions of the business angel so that he quickly understands the financial interest in joining your project. The quality of presentations, both in substance and in form, is an essential factor in assessing a project (structuring the presentation, highlighting the business model, market knowledge, rigor when building assumptions ...).

Conclusion

In conclusion, the fundraising exercise is technical, time consuming and difficult, requiring transverse skills (technical, commercial, financial) and a rigorous approach. Facilitate a successful fundraising is for the entrepreneur to successfully take a step back to his project, prepare a strategy, choose the right moment to start the research and know how to adapt the quality of its presentations to investor capital requirements . In this exercise, be in good company can make the difference.