Word of mouth and other ‘free’ marketing channels often don’t scale well.
My heart sank When I spoke with a startup founder who proudly stated that he had grown to a client base of 1,000 people. Organically. Being scrappy and frugal are good qualities to have as a startup, but your investors want to know how to scale quickly when needed.
If all your growth so far has been organic, you may not know how to accelerate the business. After all, you don’t even have a measure of what it costs to acquire new customers.
You never know how much money you have to raise. At best, it makes you look like an inexperienced founder. At worst, it completely ruins the fundraiser.
Startups typically raise money for one of three reasons: to hire a bigger and better team, invest in development, or increase growth. Your “Question” slide outlines the milestones you need to hit to get the company to the next milestone, and your business plan shows how much money you need to invest to achieve those goals.
You can’t know how much money you need to grow the company without knowing how much it costs to get customers, which means you don’t know how much money you need to raise. At best, it makes you look like an inexperienced founder. At worst, it completely ruins the fundraiser.
But it doesn’t have to be like this. By thinking about how you collect this data, you can assure your investors that you’ll know how to measure up when the time comes.