5 things startup founders need to think about to attract VC funding

2023 was a tough funding year across the market, so many founders are looking hopefully ahead to the promise of 2024.

While I believe there is going to be some recovery this year for startups seeking funding, this will be gradual and geared towards the larger end of the market, as mergers and acquisitions and IPOs open up ahead of early stage funding.

So if you’re a founder aiming to raise capital in 2024, it’s best to temper your expectations. It’s going to stay tough out there, as funds struggle to raise the capital they’re seeking, and investors wade cautiously into the new year.

But in the meantime, there’s plenty that startups can be doing to get on the front foot and set themselves up to be ready for growth and success over the rest of 2024.

Here’s what you should be thinking about.

1. Taking a data-driven approach

Knowing your data well and being in a position to implement and wield it will give you an edge over those startups who don’t.

Tracking your numbers closely is imperative to understanding your business performance, and puts you in a position to assess what’s working and what isn’t, so that you can drop things that aren’t delivering, and double down on the things that are.

Get comfortable with knowing your numbers intimately. Knowledge is power.

2. Revenue is the only validation that matters

It is essential to focus on traction and revenue.

If you’re working towards revenue milestones, you might need to adjust strategy to tack your way. For example if you’re aiming to achieve Z, then you’ll have to make it through X and Y on your way.

Look at your pipelines and make an honest assessment of why a pipeline might not be converting. It’s time to ask the tough questions.

Is your product actually market fit? Are you designing your product to enable strong network effects? Be honest and change your strategy if things aren’t working.

3. Never stop learning

The most successful entrepreneurs are the ones who are continuously learning. From their mistakes, their successes, their competitors and their peers.

So make it a priority to read about and listen to other success stories, and set up the right conditions to encourage an environment of testing, iterating and learning.

Be curious, rather than attached to a particular outcome. This will give you the flexibility to be a passionate problem solver, rather than someone wedded to something that isn’t working.

Founders should constantly be testing, learning, iterating and pivoting. Staying still means falling behind.

4. Know where you’re going

While you shouldn’t be adhering to set-in-stone tactics, you should still have a guiding north star. Founders will be pulled in so many directions, so be intentional with your focus and your energy.

This intentionality comes from knowing where you’re going, and executing a solid plan. Following your plan and hitting milestones along the way will give you incredible clarity and confidence.

As opportunities and projects arise, think about what’s going to help you get closer to your plan, and what’s going to distract you and take you off track.

Learning how to say no can be one of the biggest challenges and one of the greatest gifts.

You might also need to say no to new year goal setting. While it’s tempting to get caught up in setting goals at this time of year, be clear about what’s actually achievable. Are those goals actually worth the paper they’re written on, or are they too lofty and vague to ever come to fruition?

5. Mindset and motivation

You’re on the entrepreneurial rollercoaster, and it’s an unpredictable ride. The founders who succeed are resilient enough to anticipate, and be proactive about, potential obstacles. They bring together grit, perseverance and motivation to succeed.

Taking control of your mindset means accepting there will be things you can’t control. There will be setbacks and let downs. The path to success is never linear.

To support your mindset, create a schedule that sets you up for success and nurtures your mental health. This will be unique to you, so test things out to find what works.

For example, I now workout at home first thing in the morning because it removes the obstacle of getting to a gym, and genuinely helps me feel better, more clear-headed and happier.

Metrics matter

Finally, pend time on the metrics that matter, so you’re empowered with a clear plan, insights on the data that matters, and agility to navigate curveballs along the way.