❌ Without traction and without data, it's too early! Traction corresponds to the dynamic in which the startup is, according to the growth of its turnover, its customer portfolio, users, etc... It allows to validate the interest of investors. Thus, if the startup is at an immature stage and without data, raising funds is not the right solution! It is better to postpone the raising of funds, which will in any case be considered too premature by potential investors. By going too early to meet them, you will have lost time and stick a bad image on your startup.
☑️. The startup has good traction. Two cases can demonstrate that the startup is on the right track:
- Its turnover is growing but not enough to cover its expenses.
- Its break-even point is not yet reached and it is short of cash. It is therefore relevant to raise funds to be able to reach this famous break-even point!
☑️. The startup's business model is demonstrated... ...On a small scale! If it had more money it could increase its sales force and thus increase its growth. In this case, fundraising is obvious! It is the easiest type of fundraising to achieve.
You don't (yet?) meet all the criteria for a fundraiser. So how can you finance your startup? If your startup has neither traction nor a proven business model then here are our 10 options to finance you without fundraising!
The most important
It doesn't matter when you contact a VC. It's easy to have a first meeting with them, because they love screening the market.
What matters is how and when you recontact them : be sure to have good fresh news, show that you have learnt a lot (new customer, new funnel, new product etc.).
Source : https://www.pfactory.co/2018/01/31/10-pistes-financer-startup-lever-de-fonds/