Nadira Azermai gave us an interesting insight into her search for funding. One thing soon became clear: the struggle is real. “Getting funding doesn’t read like a novel,” says the founder of Scriptbook, a tool that uses a complex algorithm to determine whether a film script will be successful or not. “It’s a tough track, and you’re guaranteed to experience problems from the start.” To best assess and anticipate those problems, we list all the things that can go wrong, so you’ll be better prepared when the time comes.

#1. Finding and keeping the right teammates

Many investors prefer to entrust their capital to a team rather than one person. That’s when you need to start looking for a co-founder. But finding that person isn’t always easy. And for some people, working together just doesn’t work. Decide in advance if that is a consideration you want to make or not.

The same problem applies to employees. It may happen that you don’t find the right profiles. For example, Nadira didn’t have a data scientist in the beginning, while AI builders are hard to find in Belgium. Then you spend your money on freelancers, but that’s not such a sustainable way of working. What about your start-up? Does it damage your company’s credibility, or is it no problem at all? Prepare yourself for difficult questions.

Another important question: are you still on the same page with your team? Initially, you may have shared the idea of looking for funding, but plans evolve regularly. Especially in the start-up scene. Regularly check if you still stand behind the same idea and if you are willing to make the same sacrifices.

#2. Investors, shares and negotiations

Finding the right investors is also a challenge. Getting money is nice, but quid pro quo. Be careful which investor you get involved with. Is the money worth working with a venture capitalist that doesn’t click? Or do you opt for the long term vision and leave the money aside for the time being? Golden advice from Nadira of Scriptbook: Only shop with people you know will support you. Look beyond your nose, and don’t choose the first guy you see.

There is a chance that in the early stages you will blindly take advice from every investor that crosses your path. Watch out for that too; investors are only human, they don’t always know better. It is often more instructive to talk to people who already have a lot of entrepreneurial experience and additional problems behind them. They can warn you like no other for the possible pitfalls.

A common characteristic of investments, but still many start-ups are scared to death of it: giving up shares. Just like Joey doesn’t like sharing food, some people don’t like sharing companies. You may find an investor who doesn’t expect shares, but know they’re harder to find. That is why a good match is so important!

It is also possible that you have started a negotiation well, but that you notice that it is going downhill. As hard as that decision is, sometimes you have to choose to put a stop to it. Stepping away from money is hard in itself. Especially when you’ve already suffered for six months. But taking the money with a bad feeling is not the right decision either. Keep in mind that you’re going to meet the right people someday.

Negotiations gone bad? And all you’re left with is a custody battle? This can be prevented by making clear agreements from the start, and not blindly signing for the money.

#3. Time, time, time.

Raising money is a process that easily takes between 6 and 9 months. At Scriptbook, it was those full 9 months. So keep your runway in mind! If you know you can run for another 7 months before you go out-of-business, it might be high time you sought financial help.

If you have VC money A business plan is an important requirement. But it’s not always feasible to wait until you’ve ticked off all the business plan points. Either you’re already too late, or you’re out of energy. And by the time you’re done, your plan may have changed again. In short: there is never really a perfect moment! On top of that, the right party will not find a 100% watertight business plan a requirement. They invest for a large part in the person behind the company. And as Nadira so nicely put it: ”A business plan is hot air, everyone knows that.”

Curious about other investment options? Discover the alternatives.

#4. Other matters

  • It is often said that raising money in Belgium is more difficult. We are a relatively conservative country with many conservative VCs. Do not limit yourself to Belgium! Look beyond the borders.
  • You can have bad luck with your gender. Yes, in 2017 it almost sounds too ridiculous to be true, but unfortunately it is still the reality: Women are less likely to raise investments than men. Unfortunately, the glass ceiling also exists here and skepticism is all too common. But don’t worry ladies. We definitely want more women at Birdhouse!

Moral of the story: raising investments is hard work and there are many stumbling blocks on your path to financing. On paper it seems simple, but in reality it is often different. However, if you are aware of those potential problems, you can better prepare for them. Even start-ups that break all the rules sometimes achieve what they want, so did Scriptbook. So don’t be put off too much and just go for it!