Startups can be fantastically diverse; from fintech to food services to innovations in medicine that save lives. New businesses pop up all the time and each one has its own unique take on how to fill the gaps they see in the world.
But no matter what their industry, one fact is universal: every startup needs money and that money has to come from somewhere. Very few companies bootstrap all the way. So, whose job is it to secure that funding?
Why fundraising has to be the CEO's job
If you’re the founder and CEO of your startup, it may feel as though every aspect of running your company is your job.
Let's face it, in the early days of building a startup, founders find themselves juggling many hats before they can afford to bring new people into the fold.
But, although delegating key tasks to people in your team better equipped to handle them is wise, fundraising has to be the CEO’s job. If you're both the founder and the CEO, the same applies.
If you’ve never been great at public speaking or convincing people to buy things, you might not be a fan of this idea at first.
Everybody on a founding team has different strengths and weaknesses and if the CEO isn’t the most charismatic or creative person on the team, they may seem an unlikely choice to handle pitches.
But you might be surprised to know that the CEO has more power in a pitch meeting than you’d think. Even if you’re not the best at public speaking, it’s important for you to be present in pitch meetings, connect with investors, and let them meet the person steering the ship.
If you were expecting something profound, you’re going to be disappointed because that’s it, pure and simple - your investors expect to meet the CEO.
Of course, it’s tempting to delegate the task to a skilled salesperson. After all, selling is what they do and you know they’re going to be great at it. So, if you’re an introverted CEO who struggles to make connections with people or sell yourself at networking events, outsourcing sounds like a great idea.
But, at the end of the day, presenting investors with a salesperson who can do the job better than you is not your ticket to success.
Why? Because you're not there to sell a product, you're there to tell a story and bring your vision of the company's future to life. A salesperson's delivery will lack the authenticity that only you can bring.
It's also tempting to send your company's CFO, after all, they're the ones closest to the numbers. While your CFO can help you prepare a winning pitch deck, and maybe even tidy your cap table, they shouldn't be the one pitching. Their role fundamentally is to support you, the CEO.
Investors want to know your story. They want to know who they’re investing in and why. And that’s why they need to meet the CEO: so they can know why they should give their money to you, to your product, to your dream.
Fundraising will be one of the biggest challenges you face. Although you might think you’re putting your best foot forward by sending a charismatic character to pitch your startup to investors, you’re actually shooting yourself in the foot.
It’s okay to be nervous. It’s okay if you’re uncertain and you don’t have it all figured out. But you can work with your team, do your research, and craft a pitch deck that will help you knock those pitches out of the park!
And if you didn't know, there are schemes specifically designed to help early-stage startups attract the funding they need - schemes that are very attractive to investors.
The Seed Enterprise Investment Scheme and the Enterprise Investment Scheme are prime examples, offering investors generous tax reliefs for investing in ambitious startups.
But first, you'll want to apply for advance assurance.
Here are a few more blogs you might find helpful:
- Startup investors - who they are and where to find them
- What investors look for in a cap table
- Tips to amaze VCs from our friends at Concept Ventures
- Seven things that will impress angel investors
Best of luck!