In a recent article for Entrepreneur, Matt Barba (@MatthewBarba) discusses the hurdles founders of new startups have to face, ranging from creating a business plan to finding a cohesive team. Out of all the challenges, however, raising money seems to stand out. The process of going through funding rounds is quite stressful and difficult, and with that in mind, Barra gives us 6 pieces of advice for raising your next round of funding.

• Gut check

Make sure that you know exactly what you want. If you’re not ready to make a commitment for the long haul, then raising money could not be the next step for your business. Ask yourself, “Am I ready to grow?” - keep in mind, raising money entails commitments to investors, employees and customers so you must be ready to commit for the foreseeable future.

• Seek advisors

It’s easy to let money short-sight you so don’t let it dictate the relationships you make. There are more indirect paths to money than there are direct ones. Fundraising, while it involves money, is better thought of a relationships and value. Find advisers who bring important insights to the table as a business partner. By asking for advice, your relationship can be built quickly and this relationship can have lots of potential to become something more. Don’t just pursue CEO’s, instead, look for experiences professionals in operational roles who will have a wealth of knowledge to share.

• Talk to founders

Be sure to include other founders in your network of advisers- they’ve gone through the process before and recently. Try and find people within your community and try to get to know the founders who are one step ahead of you (9-18 months). The players, market and environment will be fresh in their mind so be transparent about where you are and what you want - chances are they’ve felt the same way before too.

• Choose the right type of investor

There are pros and cons to every type of investor. Angels are individuals who invest their own money - pros: you can raise investments in just a few weeks and these angels tend to be flexible like advisers who are willing to offer guidance, cons: angles often want to be over-involved in the business decisions which means prepare for more than one cook in the kitchen. Super angels have larger fund than angels and often are investing other people’s money as their job - pros: they often want to offer guidance and because of their money you can have fewer investors, cons: they may expect involvement proportional to the sum of money they invest. VC’s have the most cash and they invest in dozens of companies in global markets - pros: brand name prestige, attraction of great talent, leads to more funding, formality, cons: they are the hardest to win over, we’re talking months at a time.

• Watch out for the “yes” men

You’re without a doubt going to hear the word “no” plenty of times. Even the best ideas get rejected. However, it’s the investors who never say “no” that are even worse for they can string you along for months at a time all to drop you at the last minute. Do not allow them to dictate any of your decisions unless you have already won their investment - don’t be afraid to draw the line.

• Give yourself over

Once you’ve started the money-raising process, you need to be ready to relinquish control of your schedule for your investors’. As Barra calls this the “wrecking ball effect”, it can be a major obstacle to your workflow and to running your team. Make sure that the people around you understand that this might happen and build a team you can trust to pick up your slack when you have to answer to your investors.

Raising funding is a game-changer in terms of a successful business so it’s important to be prepared for it. Stay positive, work with a trustworthy team, and wait for that “yes.”

Read source article here