The importance of forming the right Advisory Board for Capital Raising
Working with hundreds of startups on their early stage rounds of capital raising, what we’ve found to be the common denominator across geographies and most challenging obstacle is that for many founders, the first rounds of capital raising are stumped with the inability to get in front of the right investors at the right time.
This can be either because of their underdeveloped professional network, no proven track record, lack of credibility, or high operational costs often persisting in the pre-revenue stages. Early stage capital raising is often most difficult, yet absolutely essential to the remaining lifecycles of the business.
One of the solutions for early-stage founders is to consider forming an Advisory Board as early as possible, not just for the benefit of easier access to capital, but also because there is so much more opportunities and upsides to it.
An advisory board is a select group of independent people who provide strategic advice and support to the owners of a business. Advisory Boards are not regulated under the Corporations Act. They advise only and do not make decisions like a formal board, allowing the founders to access an independent view and a safe place to discuss issues of major significance.
Credibility & Networking
The right people on your Advisory Board will not only act as vote of confidence in your business to create greater credibility in the eyes of investors, but will also enable you to extend your network. Then, with wider networks, the more people hear about you, the greater your credibility becomes. The two work in tandem towards asserting your business idea and value proposition.
Well-picked Advisors would ideally have a ton of experience in the field, and what comes with that, connections to other founders, investors, potential business partners, and customers. Thanks to them, your business gains early access to the market as well as a vast sea of opportunities.
Very often, Advisory Board members can choose to invest in your business themselves. This ensures not only that you get easier access to capital, but also that it will be in your Advisor’s interest to oversee your business performance to ensure high returns. This mutually beneficial relationship can form a basis for robust growth.
If you’re currently looking to raise capital – or know someone in your professional networks who is – don’t hesitate to reach out to us. Connecting founders with the right people has been the very core of KapVista’s mission since inception. Oftentimes we’ve seen how the right introduction can go a long way, with businesses transforming in front of our eyes.