Everyday someone comes up with what they think could be the next billion-dollar idea and start considering taking the plunge into entrepreneurship. However, one of the toughest parts of initiating the entrepreneurial journey is raising startup capital.
A startup’s journey has several highs and lows thus the entrepreneur is likened to that of a survivor. It takes effective deployment of skills along with intelligence and a focused mind to build something worthwhile. Hence, before your leap into the adventures of being a startup founder, it is important to be as prepared as possible. Here are 5 key elements to keep in check that should count as part of your startup capital.
Choose your industry on the basis the skills and expertise you and your team possess. This will help you take decisions that are the most advantageous to the product or service you plan to provide. While some industries have low barriers of entry and are much more competitive, others may be less competitive but are more complex and capital-intense. However, all industries have their challenges and require some amount of capital.
Keep in mind factors like regulations, velocity of change in the segment and technologies that emerge within it. For example, fintech and logistics could have slow-moving regulations and approvals that often include financial regulators and securities, etc. One way to deal with this is try finding an expert or mentor who has experience in dealing with these issues and can teach you the ropes.
Skill and experience
Develop as many skills as you can while you garner more and more experiences. For example, even while developing a website for your company, get a general understanding of how it’s done. You may not require knowledge in detailed-technicalities but an overall know-how goes a long way for you and your team in the developing and integration process. Again, find someone who knows the ins and outs and yo trust enough to teach you some of it.
Consider all the access you have to knowledgeable advisors in terms of fellow entrepreneurs, VPs, VC, etc. and build a genuine relationship with them. Always remember that in order for someone to help you out, you need to offer them some value as well, so figure that out too. Another thing to keep in mind is that every piece of advise should be taken with a pinch of salt and careful consideration. Identify the strong point in each person and focus on asking them for advise relevant to their expertise.
Take your time
Any business looks to ‘disrupt’ the game but trying to reinvent the wheel is not as easy as it sounds. Building something from scratch takes a lot of energy and time spent on trial and error. While you may want to stand out and be different from your competitors, it isn’t a bad notion to look at what others in the segment are doing and try to work out how you could use that to your advantage.
Moreover, don’t close your options for collaboration and getting advise by labeling any and everyone as a ‘competitor’. Some experts have spent time in the business and can part a lot of much required knowledge and tips on building or improving your product or service.
Build a network
Any entrepreneur would tell you how important it is to build a network – Sir Richard Branson himself endorses the importance of entrepreneurial networks. Moreover, building a network for project-specific requirements like public relations or human resources and hiring goes a long way. This saves a significant amount of time and resources spent on looking for and relying on freelancers, agencies and ‘specialists’ for one-time assignments.
Raising startup capital is undoubtedly no easy feat which is why so much emphasis is laid upon it. However, it should not be the only focus of an entrepreneur and one should understand that you increase your chances of success by increasing your startup capital in terms of knowledge, expertise and skills as well.