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Growth Strategies / Mistakes

#6 Common Mistakes Entrepreneurs Make After Raising Funds

To stand tall in the market and among the competitors, raising funding has become an on-going trend within startups today.
#6 Common Mistakes Entrepreneurs Make After Raising Funds
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4 min read
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The ability to have everything accessible to your fingertips is a technological revolution our country is going through.The demand for something new and something innovative has led to the emergence of a startup in every corner of this country. The more the demand, more is the supply. To stand tall in the market and among the competitors, raising funding has become an on-going trend within startups today. To grow and further flourish in their own respective industry and to rise among the competitors, every startup seeks a certain amount of funds which can help them meet the ongoing needs of daily operations and to also further expand their business while employing more people.

A great idea which an entrepreneur pursues passionately, that brings forth a solution to the problem can make way for a good deal of funding. But landing a good amount of funding is not as easy as it may sound because of various factors like huge competition, ever-growing startups. The funds have become more careful nowadays following some examples in the past. They have become more cautious as to where their money is being invested and how much return can it earn to them. But suppose, you have landed a great deal with huge amount of funds, then what? How are you planning to use that chunk of money? What is the future scope? How are you planning to fight the competition while justifying the funds raised?

Below are some points to be taken care of after raising funds for your company to avoid some common mistakes:

  • You Have Created a Solution But Do Not Forget About the Problem That Caused It - It’s great that you have created a solution to a problem. You become so engrossed in the solution that you forget about the problem. Working on your solution or product leads you to drift away from the actual problem which created it. Entrepreneurs need to spend more time proving to an investor that the problem is actually a problem. Only after that, it is time to prove you're the best person and team to solve it.
  • Paint the Bigger Picture - Being bootstrapped till now has led you to think inside a closed box. You have been worrying about the small expenditures and taking baby steps towards the growth. Raising funding allows you to paint a bigger picture for your organization. You must start thinking big and working towards becoming global instead of local.
  • Understand Your Investor and Maintain Investor Relation - While pitching, every entrepreneur needs to understand the stage where they stand and the future projection, simultaneously, understanding their VC’s potential of the investment. Post-funding many entrepreneurs forget to maintain a healthy relationship with investors. It is inevitable to keep your investor in loop regularly so that they can support your growth strategy and can be involved in important decision making.
  • Create a Good PR campaign - Not creating an effective PR post-funding is as good as not advertising your product in the market. An effective PR campaign can lead to a good recruitment and can also open doors for the future funding options.
  • Taking and Giving Huge Pays - Post-funding one of the common mistakes which entrepreneurs do is that they increase the pay of themselves and the employees. Raising funds does not mean taking huge payouts but the money should be invested wisely and thoughtfully in the direction of growth and to sustain the business.
  • Spending Funds on Wrong Things - The money you have raised is a debt which you will have to justify. Moving out and getting a new space and modern office is very easy but bringing in the same returns is easy. Use your investor’s money wisely.

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