The Challenges of Capital Raising and the handy insights for Tech CEO's and Founders to overcome them.

Gisela Montello-Bruce

Head of Strategic Services

It’s not often you get to pick the brains of Tech legends walking the proverbial halls - so when you’ve got them right on your doorstep, it’s not entirely unexpected that we would take full advantage. We made them share some of their knowledge and expertise on the fly, and it's all about capital raising and offshore growth - a journey fraught with both headwinds and tailwinds.   

With Tech sector ever evolving, mastering the art of capital raising is a crucial milestone for startups and scale-ups.  We feel it calls for an approach that uniquely resonates with the unique nature of New Zealand's tech ecosystem.   So after the brain picking was complete - we pulled it all together.   Let’s get started.

Clarifying Your Fundraising "Why"

Any capital raising journey kicks off with a fundamental question:  Why are you raising funds?  This isn't just investor homework; it's about setting your venture's compass. Whether it's scaling up, crafting new offerings, or breaking into fresh markets, your goals will dictate your approach and the narrative you share with potential backers.   Get good and clear on this one, it’s one the most powerful tools as you head into the investor den.

Aligning with Investor Expectations

The investment landscape is shifting.  The days of endless runways and patient backing for long-term visions are giving way to a need for quicker returns.  It's essential to sync your business game plan with what your investors are hunting for.  Are they after quick wins, or are they game for the long haul typical of deep tech ventures?  This alignment is key.   So do your research on the investors,  and qualify expectations early.  

The Crucial Pivot: Selecting Your Market

A pivotal decision in a tech companies go-to-market (GTM) strategy is the selection of the international market or markets for expansion.  This decision is not to be taken lightly.  The chosen market must justify the investment, especially when privacy, security and specific standards or regulatory compliance are necessary. The size and potential of the market must align with the investment and the startup's ability to deploy resources effectively.

Entering a new market requires a nuanced understanding of its unique challenges and opportunities. Tech leaders need to consider whether they have the requisite expertise, networks, and local knowledge to successfully navigate the new terrain. This strategic choice significantly influences the growth trajectory and its attractiveness to investors.

We love one idea we heard of ‘localising global’ - this is setting up a team right here, but assigning them to the country you’re looking to enter and tasking them with the sole focus of learning all about that market.  Put up screens, get the flags up on the wall, build the company lists, speak the language if that’s needed, and get fully immersed here, before you get boots on the ground and in the market - there.

The Value of Smart Money

When it comes to raising funds, it's not just about the amount; it's about the value-add. Smart money brings more than capital to the table; it includes expertise, networks, and strategic support. For Kiwi startups eyeing international markets, the right investors offer more than dollars—they provide mentorship, connections, and guidance that can be game-changers for market expansion and product development.   So here, be honest about your blindspots, and what skills nad experience are lacking that will bring you harmony with your potential investor.

Timing and Valuation: Getting It Right

The success of your fundraising venture can hinge on its timing. A well-timed raise, done before you're in dire need, puts you in a stronger position for negotiation. On the flip side, a hasty effort can lead to less-than-ideal terms. Valuation realism is equally critical; an overinflated valuation can turn off potential investors. A balanced view, informed by market trends and current day comparisons, sets a solid foundation for your valuation aspirations.   So look into the market, be honest, don’t hope - plan.

The takeaway?

For Kiwi tech companies on the verge of a capital raise, the journey is as demanding as it is rewarding, but a strategic approach of clear objectives, investor alignment, smart money vs. dumb money, and grounded preparation, all lay the groundwork for navigating the capital raising minefield.

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You can download our Capital Raising Guide, designed to help CEOs, founders, and board members understand the essential marketing approaches and programs that must be in place, ensuring alignment with business objectives and clarity on the go-to-market (GTM) strategy while ensuring you have the right marketing skills in place, before, during and after.

If you need support to get raise ready get in touch, we're here to help Kiwi Tech businesses grow.