Top Offbeat Fundraising Tips for EdTech Start-ups


Top Offbeat Fundraising Tips for EdTech Start-ups

Raising funds for any business has always been tough. However, that does not imply that entrepreneurs would stop thinking about raising funds or not face the hurdles of raising early-stage VC money. The rate at which education industry is pacing up, the edtech start-ups cannot afford to sit back thinking how to raise money to grow their business. Rather they need to look out for smart steps which will help them grow and stabilize their business. Not to forget, competition in the market is severe and it therefore calls for intelligent moves as one great step can be an accelerator to success and on the contrary a big mistake, hard to recover.

In this piece we would not be discussing about the fundamentals of fundraising as it has been already discussed on various occasions. But what we are interested to discuss about in this piece are some offbeat strategies which if edupreneurs follow can help them in their fundraising journey. However, before following them uprightly, it is advisable to analyze each of these strategies and then apply them at different stages of fundraising process.

Right Timing- This is perhaps one of the most important strategies apt not just for the edtech business but any sector of business in general.

Professionals are of the pinion that, start-ups having free or freemium products who are looking out for SEED and Series A investments, should take the maximum advantage of back-to-school season as it is said ‘nail the iron when it’s hot’.

In the EdTech business for example, it has been recorded that most of the sales peak in the summer and early fall. So this is a time when the edupreneurs must not be fundraising but selling their business products/ services. The best time to start a conversation is around August and slowly it would show consistently high numbers in the following months as investors would see great impetus then. But in all this, it’s best to sit for a deep fundraising conversation as this helps in a deep fundraising conversation and bring in big sale.

Also, when the high sales season starts to slow down say around October and close fully by the beginning of the following year, the entrepreneurs must start fundraising drive without any fail. It is a good time to gain valuable responses but again from beginning in mid-December until the second week of January, follow ups from the investors are almost down due to holidays and festivities.

  • Bringing in Fundraising Thrust- VCs look up for momentum in the entire process and therefore as an edupreneur it is important for them to move into fundraising mode. A pitch is regarded as an ideal option if it has taken the shortest window possible. This is so because, by extending the pitching window would result to losing steam in business.
  • Both precise and detailed conversation are two important facets of any business and thus to do so it is important to book several meetings per day.

    Another tweak is to take the first meeting with the most unlikely investors for low risks and one can also tweak the pitch based on their feedback. If one gets at least a few firm commitments then it’s a signal that they may perhaps found some momentum in their round. So it’s important to strengthen the talk with everyone who showed some interest by announcing about a closing date.

    It’s very important to remember that even if there is no lead, one should share a standard term sheet to at least get feedback on the same. Early stage EdTech investors hardly show keen interest to lead a round but in case they come across terms that sounds standard they do not step back from commitments to investments.

    1.       Use the power of Tweet- Start-ups would be surprised to know that VCs do check the company’s Twitter feed. So before one goes for the big VC meeting, they can nurture their twitter handle with meaningful Tweets for instance may be some reposts of interesting integration with Google Classroom just the day before the big VC meeting.

    For the CEOs, tweeting opens up great opportunities both for personal development and for their business. To know more on this, click here

    Leave Aside Ego at the Door - one of the reasons why many entrepreneurs fail up raising funds for their organization is because ego is a big obstacle. One should take up meetings with anyone in a VC firm say with a junior analyst or even the summer associate and not just confine it to simply a senior partner.

    Accept it or not, all VC associates have immense influence as well as access to valuable information and it is because of this that one finds them having very good terms with their partners for they know them so well. This fact is important for any start-up when they are looking up for fundraising. If these start-ups come in the good books of the VCs, it is a surety that they will find no issues with raising funds and beyond it, they will receive valuable advice on how to effectively present the products to the partners.

    Pitch with Relevant Data and Leave a Positive Impression- One thing that start-ups should definitely learn on is to express how well they run their business and get the VCs find more curiosity about the start-ups metrics. One way to do so is by pulling up the dashboard in tableau to project that one has the right data and can speak on it to make it absorbing on the spot. The other innovative way is to show off the pipeline projects directly on any sales force site or for that matter reports by PayPal because such shows transactions on bulk.

    Avoid saying Zero Spending on Marketing- Normally what happens is that, most startups begin by saying that they have $0 spending on marketing and that the traction is through 100% organic activity. Well, it’s wrong but if the goal of the startups is to show virality, it is always better to show how product love has made it all happen.

    If one starts off by saying there was $0 on marketing it would not stress on virality and would mean that they are not clear about how to calculate CAC as yet. And most importantly, VCs do want start-ups to specify clearly on how much do they actually need to acquire new users as they also know at some point of time, the ‘word of mouth’ does cease for any business.

    Last but not the least, it is utterly important for edtech startup founders to get real and pace up some achievable targets which would help them grow their business at steady pace and allow them to project it to VCs for investments to come if not quick but without much hurdle. We hope the tips mentioned above will help one in the fundraising efforts and approach VCs with confidence.

    Let us know your personal views on the mentioned tips and in case you know of any other interesting method which can help in raising funds. Feel free to share!

    About the Author
    Author: Ananya DebroyWebsite: http://edtechreview.in
    Ananya is currently working as the Content Manager at EdTechReview. She has a keen interest in Ed Tech and the ways in which it is strengthening the education sector as a whole. She is an avid reader and loves to meet relevant people & unleash new updates on various innovations in the EdTech world as it indirectly helps her pen down well-researched blogs on the niche. Follow her @AnanyaDebRoy

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