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Raising Capital Challenges: What are they and how to overcome them?

Updated: May 9, 2021

It is widely known that many businesses and startups failed because of lack of funding, but is it really money that the world lacks? With more than 13 million investors in the US alone in 2020 and more than 10 million in Asias and growing, perhaps money is not the problem. These great numbers of investors leave founders and entrepreneurs in a big highly competitive environment where hearing back from an investor can be a big achievement in and of itself.

With that in mind, it can be really stressful to raise the money you need and get your business going, the real question is

How can entrepreneurs overcome raising capital challenges?

Having a scalable business model

Investors are always looking to double their investments, so preparing a business plan with a realistic scalability report for your startup would increase your chances of getting an investor’s attention. It should demonstrate that your business will be able to generate the highest possible revenues with the least expenditure rate within a specific period of time.

Determining the uniqueness of your idea/ product:

When you are trying to come up with a model that would prove successful, the idea of copying already successful models will sound very alluring. However, relying on the same model your competitors have - if we can name them “competitors” at this early stage - has been proved to be a the incorrect method to start a business.

Remember that your idea has to be unique and authentic, so if you have an idea that solves the same problem that another business already solves, just ensure that you do not copy the same model, instead, you should think out of the box and be innovative.

Your business plan should show how creative your idea is and how it does have improvements that could serve the market.

Having a realistic time frame

Most entrepreneurs underestimate the time period required to raise valid amount of funds to execute their plans seamlessly.

Give yourself the time you need and if you are putting in the right amount of effort, your journey will lead you either to raising the capital required for your business or to gaining experience and valuable feedback to start again.

Not giving up

No matter how many times you get rejected, do not quit! Keep doing what you are doing and keep updating your process and the results will come sooner or later. Sometimes you approach investors who initially show interest in your startup and when you try to call them again you enter the maze of the uncertain "yes" and the horrible "no". It can be really frustrating, but you just need to go on with your quest and the awaited "yes" will come at the right time.

Time and experience will make your business model more mature and ready for the future growth and scaling phase.

Business Networking

Try to increase the number and the quality of your connections as much as you can, as the more intricate your network is the more you can learn.

Prioritizing opportunities

The path to find the right investor should happen after making sure that you're well prepared for the challenge. You need to make sure that you are backed up with the essential required equipment, an interesting innovative idea, a good business plan, and a reliable co-founder who can support you and give you extra knowledge and extra opportunities to secure the funds that you need.

Some of the useful business networking websites are: Ryze Business Networking , Opportunity , and Lunch Club. Social Media like Facebook and LinkedIn can be great too for business purposes!

Meteor Venture is a seed fund and incubator firm that can that helps startups raise funding and grow their online digital presence from various programs that they have to offer. Meteor Venture uses their elite list of angel investors and in house growth hack team to help you scale your business exponentially. We also have a wide web of connections with global investors, so with our letter of commitment, chances of raising the capital from our network of angel investors are much higher!

Checking global and local banks and special Credit Cards opportunities

Some banks offer special credit cards for entrepreneurs and small business owners. But you shouldn't miss the point that this is the most expensive option, and because most of the credit cards are personal, then you will be personally liable for any debt. An option most wise entrepreneurs do not go for.

Approaching Venture Capitals

Surely, this is not a usual option for startups at the early stages, as venture capitalists usually tend to invest large amounts of money, so trying to find venture capitals interested in your ideas would probably be in vain.

Before approaching any venture capital and losing the chance altogether, you have to be really prepared by having the right approach and enough understanding about the industry and the competitors out there. Also, make sure your Pitch Deck, Business Plan, Financial Forecast, and other documents are thoroughly vetted and in good shape, metaphorically speaking!

Starting a crowdfunding campaign on crowdfunding platforms

These platforms are considered a good place for entrepreneurs and investors worldwide, but as the name suggests, they are usually crowded, and you usually need to have access to a wide and well-established network of friends and contacts of professional people for support in order to succeed in your campaign which needs to be unique and properly-executed and planned for. Also, the risk for early age startups to have the idea stolen or replicated while posting on these platforms.

During this long journey of raising capital, it might not be surprising if you have forgotten why you raised capital in the first place! The sure thing is that you have refined your business plan and gained a lot of insights as a result of all the meetings and conversations you have had with different experts and investors. Join hands with Meteor Venture, and raise capital in a matter of months from our network of Investors.

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