5 Ways to Prepare Yourself to Raise Capital

Founders seeking capital to grow their business face an uphill battle. They need to be as ready as they can be for the challenging world of venture capital, from their mindset, to their financial safety nets, to their focus. 

Darren Engels , Tailwind Ventures CEO, offers his key pieces of advice for founders setting on their journey to institutional investment, based on his years of experience helping to pave a path to success for his clients.  

1. Work hard with a view to improve 

Prepare to work hard—the equivalent of ‘two jobs’ hard. This is an all-or-nothing situation and it’s hard to expect investors to go all in if you’re not all in. Growth mindset is a term coined by Carol Dweck, a psychologist and professor at Stanford University. It explains that it’s not just your ability and talent that will bring success, but the time and effort put in to achieving something. It takes a certain mindset to prove a venture is good, over several quarters, before an investor will commit their funds—it’s not as easy as convincing them. You have to do the hard work. 

2. Be self-sufficient out of the gate

Investment doesn’t come easy, so every founder needs to ensure they have the financial resources to survive—often without taking a salary—before they get external funding. You’ll need more money than you think, so prepare well. Self-sufficiency is an attribute that investors find attractive. 

3. Demonstrate confidence in your offering

The companies that Tailwind has successfully financed have been at it for years. An investable company likely has an existing client base or fan group that is encouraging them to keep going, even when it gets hard. And those fans can make a huge difference in your confidence and the confidence of investors.   

4. Focus on building your business, not capital

For founders who are subject matter experts, shifting focus to raise capital can dilute from the business itself. If they are asking for funding from different investors every day, those founders have taken their eye off the business, and it can languish. Many companies become so desperate that they forget to build a better business. Go back to #2 above—ensure you have the financial resources to survive so you can focus on the work, and not your personal situation.  

5. Recognize the skills you’re missing and get support 

Fundraising and running a business are two different things—and they need different skillsets. For new founders, it’s important to recognize the skills you have, like your field of expertise, and the skills you’re missing that will take you to the next level. As a partner, Tailwind adds capacity so the CEO can focus on the business, and we can help improve it by addressing the gaps. You can’t do it all—that’s what we are here to help with.  

If you're a founder, what is one thing you wished you knew at the beginning of your capital raise journey? Let us know in the comments.

p.s. If you’ve got some extra hours, read Buy Back Your Time by Dan Martell – it walks through how to scale your business while avoiding burnout by trading money for time. Seriously, read it.