Things to Do Before Financing
Pre-fundraising preparation is crucial. Take the time to carefully think through which potential investors in your industry are worth targeting. These potential investors could be industrial investors interested in your sector, state-owned capital, or individual investors. The key to successful fundraising lies in identifying the right people and institutions. You need to clearly understand which stakeholders have both a passion and strategic interest in this industry and genuinely believe in its market potential. Conduct a thorough analysis, prioritize your targets, and build an investor database of at least 50 potential investors. Only by accumulating sufficient volume and forming a network can you convert that into real funding.
During the fundraising process—especially in the early stages—start by approaching institutional or individual investors who can write checks of 5 million RMB or more, engaging with them in batches of 5–7 at a time. Based on their feedback, clarify what aspects of your project currently excite the market most, what concerns arise, which investment firms are genuinely interested in your company, and which ones are merely asking around casually. After deep reflection and summarization, you’ll be able to identify the 2–3 most compatible investors with whom you can continue follow-up discussions and deeper dialogue. Subsequent fundraising conversations should follow the same pattern, moving forward in cycles of 5–7 investors at a time, peeling back layers like an onion to filter out the highest-quality investors.
Time allocation matters. Founders must personally lead the fundraising effort. From the day you decide to raise capital, you should dedicate at least 50% of your time and energy to this task. You need an unwavering conviction that this mission must succeed.
Bringing on partners is an art that requires finesse. As your team grows, you’ll need to think carefully about how to find the right co-founders, determine how much equity to allocate to them, and keep them motivated long-term. On the flip side, if someone doesn’t work out, you must have a plan to protect your own interests. Designing a fair mechanism to buy back shares when necessary—and ensuring everyone can part ways amicably—is equally important. Entrepreneurship demands clarity of vision, clear thinking, courage to face challenges, and confidence in yourself.