5 Reasons Why Startups Fail At Raising Funds

Most startups fail to secure funds at the right time which ultimately leads to their decline. Here are some of the reasons that may be the cause.

For any startup to survive in the market, it is imperative that it gets the right form of investment at the right time. If the funding is delayed, it causes major harm to startups by not only draining out their existing finances but also at times ending the motivation for an entrepreneur to continue further.

Most startups fail at securing funds due to some important factors that we're going to address here. If you're an entrepreneur with a new business in the market, it's time for you to bookmark these points.

Not all startups display a significant value proposition

For any investor to invest in a business, it is the value proposition that they focus on. If they see no real potential to grow and increase their money in a short span, it is likely that an investor will pass on the business proposal. Thus, for most new entrepreneurs in the market, it is advisable to create a business plan that is best suited to grab the right eyeballs.

Sharks Fund assists new businessmen to create a lucrative business plan that is not only investable but is also attractive enough to get industry leaders on board to take the business forward.

Expected investment and valuation are often too high and unrealistic

Most startups step out into the market in search of high, and often unrealistic levels of funding to kickstart their business with a quick route to success. For the same, at times, they end up projecting high pre-money valuation in search of greater investments and hence greater cash inflow. However, for most investors, the real value of a startup lies in its idea. If they fail to see a realistic match between the business idea, its growth potential, and the valuation sought, they are most likely to reject the plan and the opportunity to invest in the startup.

Lack of guidance on pitching strategies

If you have a fairly new business in the market with no prior experience in sales, it's possible that you may not have the required skills to create a brand pitch that suits an investor's perspective. Investors look at startups as a way of expanding their wealth as well as portfolios. For the same, they need to see how your business can benefit them truly. If your brand pitch is bland with numbers that only promote you and your idea and don't show the investors how they can benefit from it, they'll see no reason to even look through the pages.

With the right form of guidance from Sharks Fund, startups can not only find people to invest in their business but can also learn the right techniques to promote their business from an investor's perspective and interests.

Incorrect market research

As startups entering any market, it is important for you to know your competition. Having information on the current economic trends, market players, their historical figures and future projections helps startups to form accurate business strategies with realistic projections and expectations. In case of incorrect market research, startups can land themselves in trouble when they approach a possible investor. Most investors are big industry players with in-depth knowledge of different sectors, their top-performing brand names and their numbers. As an entrepreneur, if one shows up to a meeting with inaccurate knowledge, it shows poorly on their business aptitude and would turn any potential investor away.

Lack of connections and networks

The most important goal for any startup is to source funds for the business. However, as newbies in the market, not many entrepreneurs have the required connections to have access to an investor. The absence of a network makes it harder for startups to reach out to industry leaders to secure the funds. In most cases, new businesses end up failing before the funding stage because entrepreneurs run out of their savings and whatever seed money they had in store to sustain the business.

If you're starting out in the market, then Sharks Fund is exactly what you need. Sharks Fund acts as a bridge between startups and potential investors and allows new businesses to find the right funding avenues. Their in-house team of experts helps startups prepare their funding pitches in ways that align with the interests of the business as well as the investors. They help 'groom' your funding applications in ways that highlight your key performance areas to attract an investor's attention to your business. Moreover, a thorough vetting is conducted of each funding application to ensure that the data projected is accurate and worthy of being pushed forward for investments.

With over several years of experience in the area of helping startups find investments, the team has built a pool of connections and networks. These very connections are what are then tapped into to not only help startups find financing but also to help the investors in diversifying their portfolios with new ideas and avenues for industry expansions. A win-win for all!

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