No amount of schooling will prepare you for the hustle & grind that comes with launching your first venture. Those first few months may require you as a founder to bootstrap your startup while also working a full-time job. In fact, you should be prepared to work on your venture as a side project until you have enough capital to quit your full-time job.
Pitching to investors as a first-time founder can be challenging as an “emotional, physical and mental roller coaster” as described by Eileen Carey in her Medium article, ‘Raising Capital As a First Time Founder.’ The best antidote to “feeling lost” in the sea of uncertainty is by learning from how founders at other companies navigate launching their startup.
Before you approach investors, Eileen suggests that you register your startup as a c-corp in Delaware, decide on equity for each founder, and have a board of advisers. You should be aware that the only people who can invest in your company are accredited investors unless you navigate the crowdfund option, which has its own set of rules. This is why it is so important very early on to have a lawyer to represent your startup. You also need to make sure that you have a bank account strictly for your startup.
If you’re a non-tech founder for a tech startup, your tech startup needs a tech cofounder. There are ways to find cofounders: meetup groups, hackathons, through friends, there is even companies out there dedicated to cofounder dating. Eileen emphasized that she and her co-founder, Lauren, “took the time to build a solid foundation for a strong business partnership as well as a great support system.” Building trust benefits both the interpersonal relationship between founders and the business as a result.
Pitching your venture to investors is both time-consuming and unproductive. That’s why Eileen suggests holding off on pitching until you have a proof of concept. Think about it from the perspective of an investor: why should he or she risk investing in an unproven venture when 9 out of 10 startups fail? Eileen suggests founders approach investors only when founders can confidently explain, ‘Here’s how we are going to make you money and I can prove it because we already have paying customers.’