Step up your funding approach

0:03 Welcome to business purpose and clarity with petri I'm your host we talk about startup life insights practical tips mistakes failures and everything between angel rounds do you have a company where you have other people's money well this is for you I've seen it too many times I hope you don't make the same mistake I've seen too too many times so many times and still do and mentioning it and yet I see it happening and it's unfortunate because it's so big thing for the company for the fundraising and it's so small thing actually to to to do it right well what I'm talking about today is you have to change and you have to realize that the expectations are changing along the ride you are with your company first when you start it's quite casual you just have a nice pizza and vision.

1:07 And and then you throw maybe some slides and it's all about your team and your big current idea and that's how you get the money because then well there isn't much more precede or seed round it's sort of the same with a small upgrade you you sold something where you have maybe your mvp stuff like that but it's mainly how you've been spending your money it's not so much how the market has approved your product because you have a probably believe oftentimes well in really good cases you have but let's take the normal case many times you don't have that much self-attraction yet you you cannot throw too much of a customer satisfaction satisfaction and and the numbers are not that great in revenues or or in the customer system side but that's okay because that's where you are you want to see it states so you throw a few more slides you saw some projections already.

2:10 And uh that's how you get the money that's where you get uh big around maybe a few vc is already in but it's still kind of casual but you you have to have something going here's the thing the next time you're going to get funding well it could be like a late seed you call it late seed because you haven't to the serious a meaning you don't have enough traction maybe the product took a bit longer to the numbers are not yet there you haven't had monetization sales uh you're just still figuring out how to do that it doesn't scale you are kind of I wouldn't say late but you haven't in a manner that would actually enable you to get to the series a the times you.

3:14 Go for around they're more like how mature you are as a company you cannot get to the scale states before you can actually scale you cannot get the bigger amounts of money for the for the things you haven't achieved and and the investors are not willing to take the risk if they don't see that what you're doing is actually getting where they want you to be in order for them to make their money and and the company to get bigger the risk the issue I'm talking about here is when you are in this seed state and you you're doing late or you actually jumping to the series a you haven't upgraded your mindset you haven't upgraded your slide slides and and approach you've been just upgrading it's just a tiny bit like incrementally but it doesn't work anymore the game has changed.

4:19 Tonight's stories the all the nice things and the ideas and stuff which worked before don't have the same impact anymore you have to start to show some real stuff the hard stuff the revenues the customer acquisitions things from the market that you cannot throw into the slide deck without any packing from the this means that you have to change the approach you have to start to do things in a way that takes time serious afford if you're not showing things what investors are expecting you are kidding ice bucket challenge says you are getting cold showers and it's making harder to raise the funds it's the same thing for your existing supporting you all the way.

5:26 There's a limit to that as well if you are not starting to show the results you've been promising them if you're starting to dilute the company over and over again they might lose their patience they might lose their cool with you because it seems that you are not going forward and they diluting their states or maybe even seeing that there are risk of losing the whole investment and the worst thing is that if you're doing this type of mistake it's in many cases it's something you can repair and fix but you take a serious hit in your reputation in the expectations and need a trust into your company this is something you can avoid not being overconfident because I think that's the worst thing what you can do showing all con over confidence you haven't done your homework you going.

6:29 Too casually to the meetings you're expecting to get the same thing and doing it the same same way you did it in the in the past but it doesn't work like that I hope you're not making that mistake a lot of entrepreneurs are doing.