Currently, Brazil has 16,000 startups and more than 500 active investors, according to data from ABStartups (2022). Investments in startups are increasing year after year, and the value they add has been increasingly recognized by the market and entrepreneurs.
Generally the startups cannot raise investment when are not ready to grow, with the target audience and acquisition channels defined, your product is not yet live or the team may be incomplete, for example.
It is worth mentioning that each investor has an investment thesis, which is basically the stage, sector and some preference criteria so that they can make contributions within a strategy and direction.
On the other hand, when raising a successful investment round in a startup, there are a series of good practices that can make a difference:
- Be prepared: draw up a clear growth plan, how much you need, how you will use the value, objectives, projection spreadsheets and the pitch deck;
- Create a prior relationship with investors: most investments happen when entrepreneurs already know the investors. Therefore, trying to consume content, participating in events and asking acquaintances for introductions can help a lot;
- Have a lead investor, someone who will contribute significant value to the round, introduce and bring in other investors. This will increase the confidence of others and increase the chances of success;
- Set a deadline to close the investment round: you can use this element as a scarcity to speed up investors' decision-making;
- Have good mentors and advocates: Investors make these trades much more often than they do. startups, and due to this asymmetry of information, it is important that you have good advice.
Following these tips can increase your chances of success. It is worth mentioning that raising a round requires a lot of dedication and attention, which is why it is recommended that one of the founders dedicates a good part of their time (or full time) during this period.
Lastly, don't forget that the investment doesn't end when the money arrives in the account. It will be important for you to count on the investor to create value, provide updates, take advantage of the network of contacts, knowledge, and maintain an active relationship.
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