The basics of acquiring funding
As you continue to develop your start-up project into a thriving company, you will be gaining more visibility both on- and offline. As a business (in the making), you are not only out there as a provider of your product or service, but also as a potential client for many other businesses. And you will soon find that as a growing business, you will also be facing growing needs when it comes to specific expert services from accountants, banks, notaries, lawyers, etc., of which there are many to choose from. But where to start and how?
Here are 7 steps you can take to overcome the paradox of choice and identify high-quality service providers that truly meet your needs:
- Define your requirements, needs and expectations. If you find this particularly hard, when you’re entering realms that are entirely new to you, start out by doing some online research to become more knowledgeable about the topic and to learn about other start-ups’ experiences. This way, you’ll get a grasp of the aspects you’ll need to consider. Then arrange a (free!) first meeting with a provider of your choice to get an even better understanding of both your requirements and expectations and of what the market has to offer you.
- Get peer recommendations. If you’re already part of a thriving start-up community that harbours a great deal of know-how, experience, and useful insights, make use of it: Talk to your fellow start-uppers to learn about their trusted service providers and the experiences they made when first acquiring them. If you’re not so well connected within your local start-up ecosystem yet, then talk to any entrepreneur you know (we all know one) – they’ll sure be happy to share their experiences. Even the most qualified recommendations are subjective, which is why we recommend looking into different options even if you get a great referral.
- Compare various offers. For any long-term contracts or contracts involving considerable costs on your part, you should be calling for bids and comparing offers from different providers. This will only be possible if you outline your requirements and criteria as clearly as possible, so as to get offers that are actually comparable. Often, when we have a need, we are tempted to go with the first option presented to us, as that seems to perfectly meet this need of ours or solve our problem. Although this can be the case, it’s important to remember that the person presenting the solution to you is both at the same time – your potential saviour and a (hopefully skilled) salesperson. We strongly recommend you to critically assess and compare – if at the end you find your gut feeling validated and go with the first offer, that’s great. You’ve made a well-informed decision!
- Ask for start-up packages. Many providers have understood that what is a start-up today, might be a major-scale paying client in a few years’ time. To acquire you as a future client, they therefore offer special deals for start-ups that will help you manage your often scarce resources. If a provider does not offer you any such special deals, don’t be afraid to politely ask for an individual discount. Convince them that making a little investment in you and your project now is likely to repay manifold in the future.
- Schedule personal meetings. Before you enter into a business relationship that is meant to last, take the time to meet your potential business partner in person to see if you get along apart from the hard facts. Especially with providers who get immense insight into your business, deal with confidential information on your behalf and should be able to support you well when the going gets rough for you in the realm of their expertise (lawyers, tax consultant, etc.), trust is key. And trust is best built from a place where you feel comfortable talking to someone openly.
- Read – understand – sign (or don’t). Before you place your signature under any document – especially if it’s legally binding and associated with costs – read it very carefully and make sure you fully understand its contents and implications. This refers to the main contract just as well as to the general terms and conditions of the respective provider and other integral parts of the contract that might come as attachments. If you identify inconsistencies, contradictions or a lack of transparency, double-check with the provider and if they are not able to answer your questions to your satisfaction, you’re probably better off not entering into a business relationship with them.
- Not all is black and white – your contracts should be. Always enter into written contracts and keep a signed copy of each one, so you can refer back to it if something goes wrong. If you get offered any special conditions, extras or anything that exceeds or deviates from the scope of your existing contract, politely ask for written confirmation and make sure the person granting you those benefits is actually authorized to do so.
Depending on the scope of cooperation and the stakes at hand, the depth in which you’ll look at a potential service provider will vary. However, integrating a smart, basic contracting protocol from the start can be an important first step towards establishing your future supplier management procedure and will spare you lots of confusion and trouble. Happy contracting!
are a few signs that indicate that a potential service provider might be just
the trusted long-term partner you are looking for:
- Their offer meets your needs and is likely to do so in the long run (a freelance accountant vs. one of ‘the big four’).
- They are responsive and happy to answer all your questions around their offer, no matter how basic.
- You experience great service from day one and are made to feel like a valued, potential future customer, regardless of your current size and limited financial means (you’re about to grow and they know it!).
- Their contracts and terms and conditions are fully transparent and aligned.
- Your request to sign an NDA to protect your IP is met (some providers might by law be bound by obligations of confidentiality – this depends on the professional field).
- They see your comparing of different offers as a sign of entrepreneurial wit and not as an insult.