The journey from Idea To IPO (And the Languish Road Between) A Straight Review of Outside Investment

The popular culture spotlights two aspects of the journey of the founder. Interviews on podcasts and printed stories are constantly asking questions about entrepreneurs who have made an impressive exit from their "big idea. And the general public is never bored of hearing about how their idea came to them on the route to their workstation, or when that idea came to them while unloading the dishwasher. It's one of our top American Dream images.

Our news media and interviewers do an excellent job in capturing the complete story of the company's departure as well as the process that led to enough success to allow them to investors. Then, stock prices and public valuations comprise the remaining story. It makes sense to concentrate our public discussions on these two poles of founder's story", says Zain Jaffer, CEO of Zain Ventures and host of PropTechVC. Jaffer is an entrepreneur for all of his life and is an active teacher in both the real and tech property space. "Those are among the most thrilling and transforming events in our business world. The real story unfolds between these two poles. It is the time of financing rounds that are extremely complex and distinct.'

Entrepreneurs who are enthused by the possibility of bringing an idea to its highest-performing final stage, whether or not it involves a public debut the public market, need an understanding of the steps and strategies that will help along the way. Here is a step-by procedure guide of the path to external investment, with top practices and lessons to guide you along the way.

With A Little Help from My Friends (And My Family)

It's a time that is often not discussed, however the impact a friends and family "round" of investing could be on an extremely early-stage idea is difficult to quantify. The stage for friends and family is the first stage at which an idea is exposed to the outside world, even if it's to only the founder's circle of family and friends. Just like any fundraising round, making it work with investors from the personal side requires careful planning.

At this point, a lot of the support could be based on an appreciation for the idea's founder instead of a thorough understanding of the concept. But, having an agreement in writing is beneficial for all parties. The founders may request an amount that is specific and tie it to a particular timeframe. They're able to create the documentation to document the transaction, seal any equity pledged in black and white text and keep track of the promises they've made in exchange. Smaller peer-to-peer platforms such as Kickstarter or GoFundMe can assist in formalizing the procedure, even if the target audience of investors is small. Making a formal approach to family and friends lending is the most effective way to ensure that the process is straightforward, professional and profitable for everyone involved.

Seed

In the majority of companies that are seed-stage, this is the point at which media attention starts. It is at this point that investors, typically angel investors, provide the critical capital needed to bring a company from concept to operational. Most often, the concept has been thoroughly tested and developed and the market-fit is evident however the team that founded it remains a substantial fund of capital that is not engaging employees and make investments in the business and operate the type of company that they'll need to take their concept to the market. The seed funding investment ranges from just $10,000 up to 2 million and provide the needed runway to move founders to the next step.

Think of an incredibly delicate seed that is growing in fertile soil", says Jaffer. That's how it feels to present a concept that is still in the process of developing for potential investors.' Trust is the key to success at this point; engaging the angel investors within an established and trusted network, as well as keeping all cards in the wallet helps founders get the guidance and intimate connections with investors they require to succeed at the end of the road.

Series (A B, Z, A)

After the encouragement of family and friends as well as the initial belief of an angel investor or private investor, the funding rounds start. The rounds may continue indefinitely, but typically vary from Series A to Series C , or even the Series D. Series A is reserved for new companies with business models that have been designed to generate real results. Investors in this stage are seeking a significant return on their investment, as the majority of companies have equity to give investors that are early on the path.

There are plenty of tips for investors at this point in their company's development. A concise and intriguing pitch deck and an elevator pitch to anyone who comes to you and a sales pitch time as well as early testimonials and the business plan which leaves little room for imagination. These strategies are all beneficial, however, successful entrepreneurs with real experiences at this point in fundraising can offer one piece of advice that is above all others to ask for more than you'll need.

The numbers vary for each operation in every sector, but the tendency to underestimate and reduce costs is common and is part of our human nature. The habit of inflated the request even if it's uncomfortable is going to make it takes in these critical occasions Jaffer says. Jaffer. Extra capital allows early stage companies to grow in confidence and avoid making too many choices because of the scarcity. Consider the big picture, and consider thinking a larger; repeat every time you need to.'

It's crucial to know that lump sums for companies do not just appear out of the blue. The trend over the last many years has been the frequency at which an organization has to go to go backto the market for additional funding is increasing. Funding rounds will become an integral part of any founder's path, no matter if it is a simple request from relatives or friends or an ongoing Series D that will never stop. The first priority for founders is to determine the best most suitable funding structure for the needs of the business. Making the ask formal, securing the initial idea, and flexing the power of increasing the request will help founders succeed in any funding route they choose to take.