Where is the right place to raise money for my startup?

How do you know where to raise money for your startup? From who? When? How much? At what 'price'?

Or Perhaps "To raise, or not to raise?" might be the bigger question?

These are really important questions to get right when you are building and testing your startup. And depending on who you speak to, and in fact where you are located, the answers will vary markedly.

If you are operating on the west or east coasts of the US, with access to a network that can personally connect you to multiple groups of Angel Investor or Venture Capital (VC) groups, often the answer might be "as soon as you've registered the business name".  However, if you are in any other part of the world, that's probably not right for you.

Core elements of your 'Value Proposition' or 'Business Model', such as market need, size, novelty, competition, supporting partners, monetisation, and traction can all play a part, as well as your ability to craft & deliver a compelling message. Even audience, background, and market alternatives or substitutes can make a significant difference. The answer, even irrespective of where you live, can be significantly different. 

For instance, consider these 2 alternative scenarios for 2 competing hypothetical Silicon valley pitches.

• Scenario 1: -You have developed a biotech drug that will cure cancer, for which you've completed early testing, have a patent, and 20 years of research data to support  the venture.
• Scenario 2:- you are developing an idea for a mobile app that allows you to send the message "HO" to your friends. (which might only have a lot of upside potential around the end of every year, and you happen to be a jolly, white-bearded fellow who likes to wear red suits & boots). 

Which one would be more likely to get funded? You'd like to think that answer might be obvious, but I can tell you from experience that it's not.

You might also need access to other sources of funds, such as grants, debt financing, venture financing, factoring, crowd-funding, startup loans, or one of a hundred other possible sources of venture funding. So how do you get the right answer for you, where you are, at your age, location, stage of development, and offering?

And what price is fair? How much do you need? How much should you seek? What are the appropriate conditions?

That's too many variables for me to give you an answer. Your 'ecosystem' might have something like a 'Better Business Bureau' or 'Small Business Centre', who have access to many of the local sources of funding, grants and business support. Or it might not.

And just like the 'hidden' job network that operates within peer-to-peer (people) networks,  many of the best funding sources are hidden and not obvious or easily accessible to the average outsider.

The funny thing about building startups, is that often, it's not the answers to the questions that you now seek that will get you to 'venture success'.

Columbus originally set out to reach India from Europe, and accidentally discovered "The New World". Oops. In asking the 'right' questions about funding, you might just discover something far more valuable than only money.

Often, the answers to the questions that you seek are not the ones that you expect. It's the questions you discover along the way, that are the real keys.

But do I know who does know a right answer to that question.  It is the person (or persons) who are in your network, or connected to someone who is, that can guide you about the "where, when & how" for your situation.

Because the single biggest determinant of creating a successful venture is not funding, or the absence of it. It is the inclusion of quality guidance from an experienced mentor, that knows you and your space, and want to work with you.

It's the mentor (or mentors) that are, or about to be, in your life, that want to see you succeed. They are your own personal cheers squad, your coach in the game of life and business, and probably, the person whom you would most like to be like.

"But I don't have one of those", I hear you say? If that's the case, and unless you live in the upper reaches of the Zambese river, I have 2 strong (perhaps harsh) but critical real-world observations to makefor you.

1. You aren't trying hard enough, or
2. You just aren't going to make it in the "land of venture success".

By "mentor", I don't mean some-one that you only read about in a magazine, or listen to their success stories. A real-life, true mentor meets 4 key criteria:-

1. they must be personally accessible to you (meaning that just aspiring to be like them isn't mentorship)
2. you must spend time with them- ideally face-to-face, on a regularly basis (one-time advice in a coffee shop wont cut it)
3. they are a person who has already walked the path before you (how could you teach something that you haven't learnt?), and 
4. is (or can become) emotionally invested in your success.

And from developing this as an ongoing relationship, (without asking them for venture funding), a number of key activities will happen.

1. They will gradually develop trust with and you and your vision,
2. You have the opportunity to demonstrate your teach-ability, and your work ethic,
3. They will guide in helping you to ask the right questions, and
4. They will likely allow you access to their knowledge, networks and experience, not just their access to funding sources.

The short answer on solving the funding challenges around, "when, from who, and how much" is that there are people that already know the answers to the questions that you seek. You can either go down the path of learning from experience, by spending 12 months on the long painful path of pitching, or you can seek out a wise teacher who can help you. 

And in seeking them out, you get the added benefits of not only not wasting your time, you'll also set yourself up for success in discovering answers to question that you don't even yet know to ask; those 'unknown unknowns" that you are yet to discover.

If you like to find out "How to find the right mentor", click 'follow me' so that you automatically get notice of my next article, on that very topic.

If you like this article, you might also enjoy these other posts by Daniel

• HELP! Someone just stole my startup idea
• How to raise $5million for your startup (and why you shouldn't)
• Are you really an Entrepreneur, or just a small business person?
• How To Go Viral on Linked In, without being an 'INfluencer'
• Are you a startup amateur?
• Winning isn't always winning - often its failing to fail.

About Daniel
Also traveling under the alias of 'That Startup Guy' , I am a co-founder of StartUp Foundation (The Startup Accelerator for Experienced Professionals) and am intensely, deeply, passionately dedicated to "The intersection between personal mastery & business entrepreneurship".

My goal is to help you, by guiding you through the steps, and past the challenges and pitfalls, to turn that 'Great Idea' into reality, whether it's a business, a product, an app or just finding an answer to a common problem. 

At the same time, I'll share with you my own journey, from which you might just draw valuable lessons of your own. I spent 20 years in corporate life before catching the startup bug. (My first venture as an intrapreneur still generates over $10 million in per year earnings). I've since designed, built & launched 14 startups across ecommerce, technology, hospitality, social networking, logistics, financial services and not-for-profit sectors.

If you've got an experience about startup success (or failure), comment about it. If you've got a question, reach out to me via your preferred social media. Other posts can be found here on Linkedin.