Written By: Peony Wong @ Ooosh Coworking
Fundraising is a challenging but crucial step in launching and growing your startup. You may have a great business idea, but without seed capital, your startup may never see the light of day. Luckily, Hong Kong is one of the best places to be for those looking to raise seed fundings. The city is booming with fellow entrepreneurs and investors of all backgrounds. Unlike other cities, the investor pool in Hong Kong is not limited to just corporate venture capitalists. Hong Kong also enjoys one of the highest concentrations of angel investors in South East Asia. Angel investors are often eager to provide seed funding to promising startups. Now the question is, where do you go to meet these investors?
Joining a coworking space is a great way to get in touch with investors and other founders. You’ll be able to mingle with and tap into the networks of like-minded entrepreneurs. This support network helps set you up for success in the pre-fundraising stage. Fellow founders can give you feedback on your startup, and help grow your customer base and perfect your pitch. This helps prepare you for your seed fundraising activities. Startups usually raise funds with the help of investor referrals, incubator and accelerator programs, and venture capital firms. It’s important to leverage all of the funding methods relevant to you. A coworking membership provides an easily accessible way to tap into all these opportunities during the early stages of fundraising.
The Pre-Fundraising Stage: Prepare to Win
An excellent idea for a startup is not enough to convince investors to back you. In the seed stage, you’ll have to be able to show potential investors how exactly you are going to execute your idea. These are three ways to prepare for a killer investor pitch.
Collect Feedback from Fellow Coworking Members
Since your startup is not fully up and running yet, seed investors need you to prove that there is a product-market fit. Achieving this fit means your product solves the needs of your target audience, preferably even better than your competitors do. To ensure a product-market fit, you should collect as much feedback as you can on your product. The collaborative environment of a coworking space is a great place to start gathering feedback. The variety in backgrounds of your fellow coworking members can bring a wealth of insights.
To start, make sure you have your minimum viable product ready. Then test your product among coworking members. Take note of what they like about your product, and what they don’t. Learn your strengths and your weaknesses. This information is useful to improve your product. You may even get insights for new product development. It’s not uncommon to go through many rounds of feedback and many rounds of changes to your product. There’s no need to worry, as the seed stage of fundraising is meant to further develop the product or service you’re going to offer. This refinement is often necessary to attain a product-market fit.
Source New Customers in Coworking Spaces
Investors often ask to speak to your customers directly. The experiences of real people who use your product or service can teach investors a lot about your startup. It’s a good idea to think about the kind of customers you could potentially introduce to investors early on.
Your customer pool may still be relatively small when you’re in the seed stage. Coworking spaces give you a chance to acquire new customers. You can find a diverse group of people working in coworking venues, with different industry backgrounds and nationalities. There’s a good chance some of the members have a need for your product or service. Even if they don’t, your fellow coworking members may know of someone who would benefit from your startup’s offerings.
Don’t be afraid to engage in some self-promotion. You’ll find that more often than not, your fellow members are happy to support you. You can thank and encourage new customers by giving out exclusive offers, such as an early bird discount or a referral reward. Don’t forget to ask them for their honest feedback after they’ve tried your product. If your customers are happy, you should also collect testimonials to prove your product-market fit further.
Practice Your Pitch with Experienced Fundraisers
First impressions matter. It is so important that you say the right things when pitching to investors, as you’ll only have one shot to impress them. Your pitch also provides the perfect opportunity to showcase your soft skills. While practicing with friends and family can be useful to boost your confidence, it’s even more valuable to prepare with experienced fundraisers. Take a look around your coworking space, and you’ll likely find other startup founders and seasoned entrepreneurs. Many of them have had their fair share of pitching to investors to obtain their seed capital. What better way to polish your pitching skills than to learn from their experiences?
Pay special attention to your opening line and introduction, as first impressions matter. Try to learn how other entrepreneurs incorporated a storytelling element in their pitch. Storytelling is a huge part of launching a successful company and can help tremendously in acquiring sales and investors. If you find yourself pressed for time, a quick chat over coffee with a fellow startup leader is enough to get actionable insights. A coworking environment is also a great place to practice your elevator pitch. Head over to the pantry, and start introducing yourself!
Kicking off Seed Fundraising: Approaching Investors
Now that you’ve proven your product-market fit, acquired new customers, and perfected your pitch, you’re ready to put your new knowledge to use. It is now time for you to start selecting and approaching investors to pitch your startup to.
Get Quality Investor Referrals
There’s a common misconception that the more investor meetings you have, the more funding you’ll obtain. Sometimes all it takes to secure the seed funding you need is one solid referral. Your coworking membership can be a great help in finding quality investors, as the best introductions to investors come from other founders. Cold calling and emailing potential investors may not be the best use of your time. Instead, aim to get valuable investor introductions from other founders in your coworking space. Your fellow members are often more than willing to share their resources to help other entrepreneurs succeed.
A successful referral can start you off on the right foot. The investor will have trust in the founder who introduced you to each other, creating social proof. You can also easily get further information on the investor from the referee, giving you the chance to tailor-make your pitch.
Getting member referrals is not the only way a coworking membership can help you find investors. You can also meet investors in your industry through the events and workshops that are organized by coworking spaces across Hong Kong. Fundraising events regularly happen at coworking spaces, so make sure to subscribe to their newsletters to keep an eye on what’s happening around you.
Take Advantage of Accelerator & Incubator Networks
Accelerator and incubator programs are incredible tools to help grow or launch your startup. Coworking spaces often have their own network of accelerators and incubators which they collaborate with. This includes private organizations, as well as government schemes. As an investor-rich city, Hong Kong is home to many accelerators and incubators, such as:
Betatron A 3-month accelerator program for companies in various industries
Cyberport A Hong Kong government-backed incubation program and funding scheme focusing on FinTech companies
HKAI Lab An Artificial Intelligence (AI) and innovation-focused accelerator program
AppWorks An accelerator program for AI and blockchain startups across Greater Southeast Asia
There are many more of these programs that operate in Hong Kong, so take the time to find the ones that best suit your company background. You’ll be able to easily tap into a network of incubators and accelerators with the help of your coworking space’s resources and community. Working with these organizations greatly improves your chances of attracting top investors during later fundraising stages, so it’s worth exploring the programs available to you.
Leverage Any Other Resources Your Coworking Space Offers
There are many other ways in which a coworking membership can help startup founders. For example, many coworking spaces in Hong Kong branched out into venture capital. Ooosh Coworking also has its own VC arm, called Catalyst Ventures. Catalyst Ventures invests in early-stage startups in the TravelTech and MarketingTech industries.
If your coworking membership comes with access to venture capitalists, you shouldn’t hesitate to leverage this as a networking opportunity. You can ask to pitch to or consult with professional investors. Whether this results in an actual investment or not, it’s never a bad idea to practice your pitch and to learn from seasoned professionals.
We have learned that a coworking membership can be a huge asset when fundraising, especially for those in the seed stage. While fundraising is challenging on your own, you can set yourself up for success with the help of your fellow entrepreneurs’ insights, and the resources and networks of your coworking space. There are many other benefits to a coworking membership we have not yet covered in this article, such as cost savings and flexible contract terms. You can start with a cost-efficient plan like Hot Desk, and then grow your office space as your team grows after securing funding. You can also enjoy access to valuable networking events and workshops, as well as fully-equipped meeting spaces to make a great impression on your clients and investors.
One of the most important things you can do to raise seed capital successfully is to consult with other entrepreneurs. There are many different coworking spaces in Hong Kong, and each one will attract a slightly different audience, and offer different resources and networks. At Ooosh, we made it our mission to help you grow your startup. You can easily start networking by attending our events and monthly social gatherings. We provide our members with free access to a business mentorship program. We also support startups through our venture capital arm, Catalyst Ventures. These resources can help you perfect your pitch and meet new investors. To learn more about how we can help you with your fundraising journey, feel free to get in touch with our team.
Comments