Raising Capital

Abstract

Capital-raising strategies vary at each scaling stage. My research and experience investing in startups suggest that a startup’s success at raising capital is directly connected to the other six staging levers. More specifically, investors are eager to invest in a startup that solves a painful problem facing potential customers that could become a large market opportunity. To solve that problem, the startup’s CEO must produce tangible results such as rapid growth in revenue from new customers, high customer satisfaction and retention, and efficient marketing to new customers. And to do that well, the CEO must conceive and execute a growth trajectory that can only be done well if the startup manages the other staging levers well. To plan and execute strategies for raising capital at each scaling stage, a startup CEO should follow the approach depicted in Figure 3-1. To succeed with these strategies, CEOs must take the following steps at each scaling stage, two of which (source of capital and investment criteria) are included in Figure 3-1: