Starting a business can be an exciting but challenging journey, and funding is one of the most crucial aspects that founders need to consider.
Let’s look at the different funding stages up to Series A and how a good compliance setup can help your startup in your funding stage.
From Pre-Seed to A: the stages of startup funding
There are several stages of funding that startups go through to get off the ground and grow. In fact, it really is a bit like planting a seed and growing a beautiful tree that you can harvest delightful, juicy fruits-of-your-labour from.
- Pre-Seed: At this stage, startups are often in the ideation phase, and funding comes from personal savings, friends, and family. So keep your piggy bank full, your friends close and your family happy! This is usually the earliest stage of funding and often the most challenging to secure. See your funding at this point as the soil in which you’ll plant your seed.
- Seed: This stage is for startups that have a minimum viable product (MVP) – see your MVP as your fat, filled-with-potential seed – and some traction. Seed funding often comes from angel investors or early-stage venture capitalists.
- Series A: At this stage, startups have a proven business model and need more significant investments to scale their operations. Series A funding typically comes from venture capital firms. Your tree is starting to grow and show potential, and you need someone to give you water and nourishment so that you can keep it flourishing.
Funding: the nourishment you need to succeed
Funding is essential for startups as it provides the necessary capital to grow and expand operations. With funding, startups can hire talent, develop products, build their brand, and scale their business, not to mention invest in the safety and security of their business. However, funding comes at a cost, and investors will usually ask for equity or a percentage of the company in exchange for their investment. Who wouldn’t want some of that scrumptious harvest?
This gorgeous infographic by Smartdraw shows the various types of funding that startups could look into:
To read more about each option check out the accompanying Smartdraw explanations.
Compliance: securing your funding future
In their article ‘The Importance of Compliance in Business’, Chron says “When you meet your legal obligations, one of the benefits of compliance is the ability to tout these on your website and in your marketing materials.”
Compliance is a critical aspect of any business, and having a good compliance setup can improve your chances of securing funding. Investors want to invest in companies that have a strong compliance culture because it reduces the risk of legal issues and reputational damage down the line. Think of it as the bird netting around your orchard, keeping out any threats to your future harvest. Here are some ways that compliance can improve your slide deck for investors:
- Highlight compliance measures: In your slide deck, showcase the measures you have in place to ensure compliance with laws and regulations. This includes data protection, intellectual property rights, and employment laws. An ISO 27001 certification is a great place to start.
- Although safety and security should be your number one priority when it comes to compliance, especially if you’re a tech startup, in the current business environment, you can’t underestimate the power of social and sustainability investment. Show a commitment to ethical practices: Investors want to invest in companies that are ethical and socially responsible. Showcase your commitment to ethical practices, such as fair labour practices, sustainability, and diversity and inclusion.
- Demonstrate a culture of compliance: Show how you embed a culture of compliance within your organisation, such as having regular training sessions, compliance checks, and accountability measures. All of these are easy to access through online tools such as Compleye Online.
Funding stages: Finding the Fertile Funds
Finding the right funding for your startup can be challenging, but there are several ways to go about it. Here are some options:
- Angel investors: Although they don’t come with a shiny halo, they probably should. Angel investors are high net worth individuals who invest their own money in startups. They often provide seed funding and mentorship to help startups grow.
- Venture capitalists: Venture capitalists are professional investors who usually invest in startups that have a proven business model and are ready to scale.
- Crowdfunding: Crowdfunding is a way to raise money from a large number of people through platforms like Kickstarter or Indiegogo. This method is often used by startups with innovative products or ideas.
- Incubators and accelerators: Incubators and accelerators provide startups with resources and mentorship to help them grow. They often provide funding as well.
Securing funding for your startup is essential for growth, and having a good compliance setup can improve your chances of success. By showcasing your commitment to ethical practices and embedding a culture of compliance, you can make your slide deck more attractive to investors.
Implementing ISO 27001 with Compleye, using our innovative tool, Compleye Online accompanied by the Comleye Online wiki (like a user manual, only better), is a great way to start your compliance journey.
Protect your beautiful orchard by contacting us for a demo.