Every startup in Toronto goes through multiple stages of fund acquisition. Interestingly, raising funds for startups, especially the ones which venture into technology as their business vertical works like gears. Thinking how?
With every stage of fund acquisition, the borrowers usually take just enough money to reach the next level. This is why there is a never-ending bull run amongst the owners of Toronto tech startups when it comes to fundraising. There is so much on this particular aspect and you will never the full until you go and get it.
Nothing about fundraising for Toronto tech startups will be easy if you go astray from the right ways. To understand the process to the core, you must get familiarized with each step.
Start with the Pre-seed and Seed Stage
This is the very first step of the fundraising journey. Circulating like a buzzword, pre-seed investment is what the owners of Toronto tech startups should be familiar with. Contrary to the traditional seed funding pre-seed is more upfront and flexible.
The goal is to raise funds up to $3 million to bridge the gap to the next round of investment. Generally, pre-product companies are favored by investors. With the acquired money, you can achieve a couple of your business goals to get started with the immediate objectives. The main purpose of the pre-seed and seed stages is to organize money for the development of a minimum viable product. So, strengthen the future of your company with a pre-seed stage and get the following benefits:
- Create more opportunities
- Working capital management
- Build an effective team
Then comes the Early Funding Stage
The early funding stage deals with the phase where Toronto tech startups lock horns to get hold of their first institutional check. This stage is indeed crucial as you will be living your ideas as a real business. With the obtained fund you need to prove the potential of your business at a broader spectrum.
At times, investors may turn away from their financial commitment. Reasons are variable. They may feel your brainchild is not as competent as it should be. In such a scenario, don’t lose hope. Often, dearth of proper knowledge makes the angel investors reject your application. In such a case provide a robust and well-documented business plan to empathize with your situation.
And Lastly the Late Funding Stage
Unlike the previous two stages, this phase is the easiest. By the time you reach the late funding stage, your company must have served a larger customer base. As there are little or zero risks associated with this stage, investors don’t shy away from putting in their money. Usually, Toronto tech startups acquire an exorbitant sum of money to upgrade their ventures into a scale-up shedding of the tag of a startup. That was all in a nutshell.
There can be moments of pain and hardships during this tenure. However, with the aid of proper guidance, the end can be rewarding. Hence, remember not to lose your peace of mind as several difficulties may crop up any time. The secret to early and hassle-free fundraising is- choose your partner and the investors wisely!