How to Raise Capital to Fuel Your Growth – Growth Hacking Unlocked

“Hey, do you work on Wall Street?” I asked the man who was wearing a suit and tie.

He sat up taller in his chair and looked down at me. “Yes, I’m an investment banker,” he said through gritted teeth as though he were telling me something very important.

“That’s awesome! Listen, I need some help.” I leaned forward conspiratorially. “I have this great idea for a business that can make people a lot of money but it needs capital to get started.”

Have you heard that type of pitch before?

Have you been looking for a way to raise money?

There are many ways to raise funds as an entrepreneur. You don’t always have to take out a loan or stalk the venture capitalists at the coffee shop.

In this article, I will share some of my preferred methods for raising money as an entrepreneur and give you tips on how to do it successfully.

This Growth Hacking course series will cover some of the best alternatives and how they work.

I want entrepreneurs like you to succeed!

That’s why I’ve partnered with Neil Patel with this helpful Growth Hacking Course on raising funds without taking out loans or credit cards.

Check it out now and learn about these new opportunities for your business growth!

Here’s Neil Patel…

FREE COURSE: GROWTH HACKING UNLOCKED

Welcome to another day of growth hacking unlocked. I’m Neil Patel, co-founder of Neil Patel Digital, one common trend that I saw was, most companies that were leveraging growth hacking and were succeeding at a very rapid rate, had venture capital to help put more fuel on the fire.

So I thought I couldn’t truly create a growth hacking course without including raising capital, just in case you want to raise capital.

So in this lesson, I’m going to talk about how to raise capital, and I’ll also be diving a little bit more into that in the next lesson as well.

When you think about funding, there’s a lot of different stages from self-funding to seed. Choosing the right type of venture can be tricky, and some options might seem more attractive than others. You then enter venture, such as series ABC or even venture debt.

And then there are your stocks. When companies go public, they sell shares of their company.

That’s why you can also get into later stage deals. You can get into M&A (mergers and acquisitions), leveraged buyouts, or venture capital.

These are all different ways that you can end up raising money.

1. The “seed” stage

In a seed round, it’s more about the idea. It doesn’t really have to be too much traction yet in order for them to invest.

So what you’re looking at is getting $500k-$750k or so with that seed round.

The goal here is just to get your company off the ground and make sure that people are

2. The “startup” stage

At the startup stage, you’re already starting to build a product. You have some traction but it’s not enough for an IPO yet.

And typically in this case what they’ll be looking at is $750k-$25 million or so with that round of financing…

The goal here is really just growth: getting your company going

3. The “growth” stage

Now, at the growth stage, you’re really looking more towards an IPO. You want to be a billion-dollar company before this point or something like that.

And in this case, what they’ll typically look for is $20 million – $500 million or so with that round of financing…

The goal here is just getting some capital in the bank and then using that to fuel the company’s growth

The Ground Rules:

– The most successful entrepreneurs have a clear understanding of their goals for raising funds, how much they need, when they’ll need it by, what type of financing is best suited for them.

4. The “expansion” phase

The goal here is more of a “steady state” – you’ve already been funded, now you’re just trying to grow your organization

The type of financing needed at this point is not as aggressive. More often than not, the company will be looking for something in the $200 million to $400 million range

5. The “exit” phase

The goal here is to either be acquired or go public

The type of financing needed at this point in the company’s life cycle will likely need to be larger (in excess of $400 million) and less risky. If you’re an entrepreneur with your eye on a billion-dollar exit, then you’ll want to find investors who are willing to take that type of risk.

How to Find Investors for Your Business

There’s a lot of institutional investors out there. There’s private equity companies, firms.

There are other options for local investors looking to invest, including venture capital companies like Sequoia Capital.

It’s not easy to invest in startups. The bottom line is that there are a lot of groups who want to pour their money into new companies, but it can be difficult for those with small amounts of capital and experience to get involved. There are pension funds, custodian banks like Goldman Sachs or JP Morgan Chase–these types usually do more financing-type investments rather than venture investment (i.e., they provide loans).

Sovereign wealth funds such as Saudi Arabia also make significant investments into the startup world because these countries have so much oil revenue on hand that diversifying assets becomes necessary.

And you’ll want to create a potential investor sheet.

You want to think about who your competitors are, who could be potential investors for you, and that’ll give you ideas.

And where I get a lot of my data from is a site called Crunchbase.

You can do other things to get in contact with people. I found out that when you use the way of getting a warm introduction, it works better. Then you will need to make a pitch deck and say what you’re trying to do.

How To Make A Pitch Deck

Some key questions to answer in your pitch deck is:

• What does your company do?
• How’s it different?
• How big is a market?
• Do you have any traction? What is it?
• What are the unit economics?
• If you have churn, what’s your churn?

And during your meetings, you want to make sure that you introduce your investor to yourself, your product services.  

It is not just about making the dilution small, but also who will be a good fit. With clear next steps, negotiations can be a success.

And you want to conclude with next steps such as they’ll think about it, they’ll follow up with questions, and try a different meeting time.

And after the meeting, make sure you follow up. 

CONCLUSION

You can find ways to fund your business growth even in tough industries.

There’s an old saying that “money makes the world go ’round.” If you’re looking for a way to raise capital, I hope this Growth Hacking Series has helped.

We’ve covered everything from cash-strapped entrepreneurs in need of investment funding and how to find angel investors; all the way up to what VCs are looking for when it comes time for them to invest in your startup venture.

Now get out there and make some money!