Building a startup starts with an idea to solve a problem that exists in the market today. While many founders partner with a co-founder, it's not always an option or preferred. Taking on growing and raising funds for your business can be daunting but working with a co-founder has its own challenges.
Taking on a startup as a solo founder can give you many benefits allowing you more freedom to make decisions without pushback. Co-founder relationships can be complicated. Co-founders may have mismatched visions for the company, slow growth with delayed decision-making, or create unnecessary frustration and hostility.
It also means you have to take on the sole responsibility of running meetings, creating prototypes, beginning marketing, filing for patents, and more. It also means you are responsible for pitching to investors to raise capital, one of the biggest tasks in growing a startup. While it may be a tough task, it can be done.
Read on to learn more about growing your startup as a solo founder and tips on successfully raising capital.
Why Grow a Startup as a Solo Founder
If you are considering growing a startup as a solo founder, it's important to weigh all the pros and cons of this decision. If you've got a great idea, an investor will eventually sign on, no matter the founding team size. Here are some things to consider when tackling a startup on your own.
You Make All the Decisions–Starting a business as a solo founder can be appealing to those who want to be the key decision-maker with no compromises. You don't have to worry about asking permission. Your startup's success is based solely on your decisions.
You Can Grow at Your Pace – Likely as a solo founder, your initial funding will come from your savings or friends and family. With this funding, you can take it easy and grow at a pace that feels more comfortable to you without the pressure from a co-founder that may be trying to speed things up.
Test Your Limits–Because you're taking on the roles of a lot of jobs, you're going to be stretched pretty thin. You'll be able to test your limits and find ways to be productive. You'll learn how to outsource and develop skills that can help you work smarter, not harder, that can benefit you for the rest of your life.
Keep Founder Equity and Control–Being a solo founder allows you to keep the founder equity and control once your company succeeds.
No Bias–If no one is there to question your decisions or provide feedback, your bias about your company can lead to poor decision-making.
Harder to Get Investors–Most investors want to see a well-rounded team of founders who knows that the work is spread out by experienced professionals. It will be a challenge to raise funds, but it can be done.
Difficult to Build a Team-Prospective employees may not want to work with a single founder at their startup. It can be risky to work with one person setting up all the guidelines and rules and making all the decisions.
It's Lonely–Let's face it, taking on something alone can be lonely. Every little win may be celebrated but having a team of people around you to share in those wins can boost morale and improve productivity.
What to Do to Raise Capital as a Solo Founder
Raising capital for startups is one of the most challenging parts of creating a startup. Still, it's essential to help get your company off the ground. These tips can help set you up for success when you meet with investors to pitch your startup and raise the funds you need.
Educate Yourself – As a solo founder, you will constantly have to educate yourself in all aspects of your business. You're going to be the only one making decisions, and it's essential to understand the impacts of every choice you make. Plenty of free resources online are available for you to tap into as you make this journey toward building your startup solo.
Be Prepared–Taking on meetings with investors requires you to be ready to face rejection because it will happen. The more mentally prepared you are for the inevitable no, the more likely you will get back on your feet and move on to the next. You don't want to spend your time beating yourself up about what went wrong. Take each rejection as an opportunity. Evaluate the interaction, your presentation, and the questions they asked, and learn from the experience. You're putting yourself out there, and if you present with passion and determination, you'll find an investor who can see the worth in your startup.
Traction–Traction is a metric that investors want to see in a startup before they make the decision to invest. Investing in a startup is risky, and they want to know that your product or service is something the market needs or wants. As a solo founder, you'll want to dedicate a lot of time to build up a customer base or a social following. Social proof can go a long way in showing traction if you can use the data to show demand in your target market. If you can show traction in the early stages of your startup, you'll be in a good place when presenting to investors.
Partner with Good Mentors–While you may be taking on growing your startup solo, you don't necessarily have to go at it alone. You can find many business professionals, entrepreneurs, and business owners that can provide you valuable insights into how to manage and make decisions in these critical early stages of developing your company. You can reach out to professionals through social media, networking events, and mutual friends or colleagues. Mentors and advisors can help you navigate tough decisions and expand your network, which could prove valuable in later rounds.
Leverage Funding Platforms–There are several funding platforms like Investor Hunt that can get your startup in front of thousands of angel investors and VCs. Create a quality and compelling profile on these high-quality platforms. Include your experience, background, expertise, qualifications, and any other business ventures, even if they weren't successful. Investors don't just invest in an idea. They invest in people, so the more appealing and passionate you can make your profile, the more likely you'll snag the attention of an investor who wants to learn more.
Hire a Small Team–Being a solo founder does not mean you don't have to build a team. In fact, hiring a team can show investors you're ready to grow and that you're flexible and open to welcoming new team members and sharing the workload.
Create a Pitch Deck–Once you have a solid foundation and the confidence you need, it's time to start networking and scheduling meetings to pitch to investors. Before you pitch to investors, you need to create your pitch deck. A pitch deck is one of the most vital aspects of pitching that will show investors your story about why you got started. It will also highlight metrics and market data and the company's potential for profitability and growth. After your pitch deck is created, practice your pitch before you get out there with friends, family, and team members. Remember to stay positive and understand you will receive many `no's` before you get someone to sign on.
Manage Your Resources–When you find an investor to work with, carefully review the deal to ensure its mutually beneficial. Find a lawyer familiar with startups who can review any paperwork before signing. Once you have your deal in place, carefully manage your money and resources and remember to track everything. As you progress, managing your funds and resources can show future investors that you are responsible, focused, and determined to transform your startup into a successful company.
Building a startup as a solo founder can be a lot to take on, but it can be extremely rewarding. You have to decide what kind of business you want to run. Do everything you can to educate yourself, network to find great mentors, and do everything you can to improve your productivity without losing steam. Raising capital as a solo founder can be done with a great plan and a passion for getting your startup up and running.
It can be overwhelming when you're ready to start on your journey to find the perfect investor. Get the help you deserve to get your startup off the ground. Investor Hunt can match you with over 90,000 angel investors and venture capitalists in one place. Learn more about how Investor Hunt works here.