Framework: prep - execute - close

Capital raising is a fundamental pillar for the growth and success of any start-up company. We have already discussed the "why" and "when" of this crucial activity, but now we dive into the "how". Here, a structured approach is key, and the method we will discuss is based on practical experience with multiple portfolio companies. This method focuses on three essential parts: preparation, execution and closing, each vital to ensuring fundraising success.

What are the key stages of capital raising?

Before discussing specific techniques, it is crucial to understand the overall structure of the process. Fundraising is divided into three major stages:

• Preparation: Clarity and confidence are the foundations in this phase.
• Execution: Here the strategies developed in preparation are applied.
• Closing: The ultimate goal is to obtain a clear "yes" or "no" from investors.

How to prepare a capital raising strategy?

Preparation is one of the most critical parts of the capital raising process, as it provides a solid foundation on which everything else is built. The steps here are:

1. Define your objectives: Clarity about how much capital you need and for what.
2. Identify the type of investor: Are they angel investors, venture capital firms or others?
3. Build tools and documents: Make sure you have a clear business plan, a compelling pitch and realistic financial projections.

Preparation reflects the clarity and confidence with which you can present your proposal. It is crucial to go to market with a well-defined strategy and all the tools necessary to capture the attention of investors.

Why is execution critical in the capital raising process?

Once you have your strategy and tools in place, execution becomes the battlefield where your preparation is put to the test:

• Research potential investors: It is vital to know who they are and if they have an affinity with your sector.
• Contact and schedule meetings: The focus here is to be proactive and diligent.
• Present and get feedback: Each meeting is an opportunity to refine your proposal based on the responses received.

The goal during this phase is to get clear responses and create an ongoing feedback channel that will help you improve your presentation and increase the likelihood of success.

What does closing involve in capital raising?

Closing is the culmination of the effort where agreements are formalized. Some important practices are:

• Negotiate terms and conditions: Make sure they are mutually beneficial.
• Legal documentation and formalization: Signing contracts and capital transfers.
• Final feedback and adjustments: Take note of what worked and what didn't for future efforts.

This last step is critical, as you are not only looking to raise funds, but also to build long-term relationships with your investors.

Capital raising is a complex but manageable process with the right strategy. These phases are the skeleton that will guide your efforts as you navigate the challenging world of business financing. By following these guidelines, you will be in a better position to secure the resources necessary to take your business to the next level. Continue to learn and optimize as you move forward on this exciting journey!