Thinking of raising growth capital in 2022? Now’s the time to start laying the groundwork for an efficient, effective raise. We asked Cyndx founder and CEO Jim McVeigh, who has over twenty years of capital raising experience, what early-stage entrepreneurs should do to prepare for the year ahead.
Keep reading to learn what your startup should prioritize through Q1, mistakes to avoid, and favorable trends for raising growth capital in 2022.
What can entrepreneurs do now to put themselves in a strong position for growth and raising capital in 2022?
Year-end planning will be critical to success in the new year. Plan ahead. Be sure to have six months of lead time for everything you are working on.
Begin making relationships now. People are inherently cautious, and it will take time (longer than you think) for them to feel confident and ready to invest in what you are selling them.
Lastly, be sure to establish the relationship before talking numbers or asking them for anything. A lot of people don’t take the time to build relationships, and that is the key to all of this.
What are the top mistakes/pitfalls to avoid for a successful capital raise in the year ahead?
Don’t overpromise! If you overpromise, you won’t be able to deliver. It can be very easy to agree to more than what you are capable of providing when you have a lot of enthusiasm for what you do but try to not let this get in the way of being honest and transparent with your customers and partners. Being excited about what you do is great, but just remember to keep things in perspective.
Don’t overestimate your revenue. You should always be cognizant of the reasons why someone should not invest in you and the challenges that lay ahead. If they do not think you can solve those challenges, they are not the right partner for you. You need someone who is all in, and don’t be afraid to say no when things don’t feel right.
What early-stage funding trends do you expect in 2022?
There are a few trends that I think offer a lot of promise for startups, namely the growth in alternative financing and other sources of capital raising. Not everything needs to come from venture capital funding, which can be very dilutive.
Another big trend is technology. New solutions are emerging which give small entrepreneurs access to the same level of intelligence larger, more established companies get from Wall Street.
For example, Cyndx empowers entrepreneurs to make more informed decisions throughout a funding round. Cyndx Raiser rapidly identifies a list of relevant investors based on a startup’s industry, raise goal, and other criteria. Meanwhile, Cyndx Owner’s cap table management system uses scenario modeling and waterfall analysis to show founders how different funding options could impact their ownership. Both products together contribute to a capital raise that costs less time and money—two of a founder’s most valuable resources.
Ready to raise?
Cyndx’s free platform helps you build simple, scalable cap tables to share with investors. Find out more