Fundraising
The practice of securing funding from investors to support the growth and development of a startup.
Also Known As
- Angel Investment
- Raising Investment Capital
- Seed Funding
- Venture Capital
Related
Addresses / Mitigates
- Funding Risk: Provides necessary financial resources to support the startup’s operations and growth.
- Market Risk: Allows the startup to invest in market research and customer acquisition.
- Feature Fit Risk: Enables the startup to fund product development and innovation.
Attendant Risks
- Agency Risk: Involves giving up a portion of ownership and control to investors.
- Funding Risk: Creates a dependency on investors and their continued support and introduces pressure to meet investor expectations and deliver returns.
- Legal Risk: Raising capital invariably involves signing of and adherence to contracts.
Description
"Raising investment capital involves securing funding from investors to support the growth and development of a startup. This process typically includes creating a compelling pitch, meeting with potential investors, and negotiating terms." - Raising Investment Capital, Wikipedia
Fundraising involves engaging with venture capitalists, angel investors, internal budget-holders or other funding sources to secure the necessary financial resources.
Variations
| Funding Type | Description | Reference |
|---|---|---|
| Seed Funding | Early-stage capital to develop a concept or prototype. | Seed Money, Wikipedia |
| Venture Capital | Investment from firms specialising in high-growth startups. | Venture Capital, Wikipedia |
| Internal Budget | Securing funding from within an organisation's existing budget allocations. | Capital Budgeting, Wikipedia |
See also: Funding Risk
Used By
No methods use this practice