Successfully raising funds as a start-up

If you’re running a new business, finding investors who believe in your project is crucial. Raising funds therefore seems essential to ensure the launch and growth of a start-up. But how can you raise funds successfully? We answer that question in this article. Discover our advice as an industrial hardware manufacturer…

Understanding start-up fund-raising

Before you succeed with your fund-raising, let’s look at its very definition. It consists of identifying and finding investors or institutions capable of committing to a company’s share capital.

By contributing funds to a company, associates receive a quid pro quo: shares. They can then sell them at a capital gain. The more potential a start-up has, the more attractive it is to investors. They’re looking for that coveted return on investment.

Above all, they remain key partners who support the entrepreneur in his or her creation. Fund-raising is therefore not to be neglected, especially at the start of a business. It enables young managers to achieve their objectives, finance their projects and develop their fledgling structure.

Raising funds can be done at the start of a project. This is known as seed capital. If the investment is aimed at recruiting staff, improving services or ensuring the company’s long-term health, this is called development capital.

Raising funds at the start of a project

In the early stages of a project, different types of investors may be interested in a company.

Receive major investments

Depending on his or her objectives, a start-up may need more capital.

Understanding the effects of fund-raising on a start-up

Is it really a good idea to call on investors to boost your business?

A proven solution

Raising funds generates more capital to move forward. It remains a solution for achieving goals and seeing projects through to completion.

One of its major advantages is that there are no repayments due. The only consideration is the company’s shares, which investors resell at a substantial capital gain.

Shareholders remain true partners. They share their professional experience, their sound advice and their contacts. They pass on cross-disciplinary skills that are invaluable to the development of the business they support.

The need for awareness

Asking for funds takes time. It may take several months before the financial investment is available.

The presence of shareholders means that share capital is reduced, which can have a negative impact on internal relations and decision-making power. It therefore seems essential to reorganize the company’s structure to adapt to its new configuration.

Agreement between partners and investors can also be weakened. Establishing links and holding regular meetings can help ensure greater cohesion between the various parties involved.

Successful fundraising

Follow these 6 steps to successful fundraising.

Step 1: Administration

To begin with, your start-up must exist. You’ll need to contact:

• administrations;

• investors;

• or platforms to protect your ideas with patents.

➡️ Discover Make it! academy, our incubator for hardware start-ups!

Step 2: Team building

A rotating team is all very well. But if your employees are monocompetent, you’ll come up against technical or commercial constraints!

➡️ Surround yourself with complementary profiles to diversify your knowledge and turn your vision into reality.

Step 3: Target and prioritize markets

Market research is essential for:

By developing a real strategy, you can take your place in promising markets.

Step 4: Specifications and Proof Of Concept

The specifications set out the product’s expected features and functionalities. The Proof of Concept is an experimental project designed to demonstrate technical feasibility and interest.

➡️ These two documents will convince your investors and potential customers.

Step 5: Partners and first price estimates

Product development can take several years. That’s why it’s vital to find partners who can bring your concept to life.

➡️ Also pay attention to the subcontractor you choose. This close collaboration must be transparent and must inspire confidence.

Step 6: The search for financing, the sinews of war

Financing is the key to your start-up’s growth. Consider all the solutions available to you!

➡️ A well thought-out financial strategy is essential to ensure the development and expansion of a company.

Our tips for successful fundraising

How do you raise funds successfully as a start-up? Here are our top tips:

1. Create a punchy, concise pitch deck for a second meeting with your investors.
2. Take an interest in your potential shareholders and how they operate.
3. Stay ambitious and don’t get discouraged.
4. Contact partners compatible with your project.
5. Understand your subcontractor’s field of expertise and its limits.
6. Surround yourself with industrialists and guarantors.
7. Pay close attention to quotations to compare what’s comparable. Some are more detailed than others!
8. Build a solid team.
9. Collect the first customer cases.
10. Keep an eye on the cost and ownership of tooling in the event of a change of supplier.

This advice applies all the more to hardware. The complexity of this sector makes things a little trickier from the investor’s point of view:

Successful fund-raising requires preparation and careful thought. By following our recommendations, you’ll maximize your chances of attracting investors and propelling your start-up forward!

Are you looking to industrialize your connected object, but don’t know where to start? We’ll help you in this article!