"Raising Funds as a mum building a business: Essential Funding Tips to Grow Your Business (part 1)," by Francesca Hodgson, founder of we are ambition
Happy Monday Mobsters,
December is officially here and the festive build up is in full swing.
This week I want to shift gears! In previous blogs we have talked about some of the softer skills and foundations for life and business, now I truly want to get down to business.
I take it for granted how much I know about funding and fundraising because I have lived and breathed this world for almost a decade. Truth be told this is not stuff I was taught at school or even in A level Business Studies, it wasn’t until I did a Masters in Business did I get support on this topic in a formal educational sense. However, what I am saying is that if you don’t know much about fundraising then please don’t worry, we can all learn and there are plenty of publicly available tools to help us learn.
As with all my blogs, I want to caveat that the content here is based on my own experience and learning. In business there is no right and no wrong, no one has a crystal ball and so if you have a slightly different opinion or experience to what is laid out here, please do join in the conversation in the comments, all your opinions and experiences are just as welcome and valid.
Lesson 1 - The Language of Funding: Key Terms Every Entrepreneur Needs to Know
One of the first hurdles in business funding is understanding the jargon. From venture capital to equity and debt financing, knowing the terminology is key to navigating the funding process. Let’s break down some essential funding lingo and investment terms.
Like any industry the venture capital and funding space can feel at times like it has a slightly pompous air to it. Acronyms and abbreviated words in every breath just to help build complexity where it is least required (in my opinion.)
My advice, don’t be afraid to stop anyone to ask for clarification on an acronym or abbreviated word. Many industries use acronyms and there are crossovers from one industry to the next. So please don’t feel silly to get clarification if you need it.
However, below this blog I have included some common investment lingo just for a foundational crash course. Don’t get frightened by the volume of terms, I promise nothing is too complex and if you want to know more about a given term then sites like Investopedia are great for research and learning.
Lesson 2 - Types of Funding: Which Option is Right for Your Business?
There are several ways to fund your business, but which one is best for you? In this section, we’ll cover the different types of funding available for business owners like you, including bootstrapping, debt funding, equity investment, and crowdfunding.
How Bootstrapping Can Help You Start a Business Without External Funding
If you're just starting your business, you might wonder whether you can fund your business without outside help. Bootstrapping—using your own resources—is a viable option for some, but it’s important to know when this is right for you and when you should look for other funding options.
Bootstrapping is a great way to maintain control and if you have the resources it is a great way to start. However, depending on your resources and the complexity and scale of your business, bootstrapping may not be a viable option to you in which case you should consider the following:
Can I save, work another job, whilst I build my venture on the side? Please be aware of any contractual terms with employers and be pragmatic about how much time you have to dedicate alongside any other role. You don’t want to hit burnout!
How much capital do I need to start? Can I access any grants or loans that are affordable?
Who in my network would support me and my business?
Who do I know that I could seek advice to help me raise finance for my business?
If you're looking to secure funding for your startup, there are several viable options to consider, including:
Debt Financing – This includes personal loans, business loans, or other professional debt instruments that need to be repaid with interest over time. It’s a common option for new entrepreneurs who need capital to launch their business but are prepared to handle future repayment
Debt for Equity – With debt for equity financing, you take on debt to fund your business, but with the agreement that the debt may convert into equity (shares) in your company, typically after reaching specific milestones or repayment terms.
Equity Investment – In exchange for funding, investors provide capital for your business in return for ownership shares (equity). This option is often used when you’re looking for partners to help scale your business, as they gain a stake in your success.
Crowdfunding – Platforms like Kickstarter allow crowdfunding for startups, where individual backers invest in your project or business in exchange for rewards, early products, or equity. This is an excellent option for businesses with a compelling product or service that resonates with a wider audience.
By understanding these funding options, you can choose the one that best suits your business needs and growth goals.
Lesson 3 - The Importance of a Business Plan and Pitch for Raising Funds
A solid business plan and a clear, confident business pitch are essential for raising funds. Learn how to build a pitch that highlights your strengths as a founder and shows why your business idea is worth investing in.
If you want to go out for funding then you will need a plan and a pitch (this is something I can cover in more detail in a future blog).
What Investors Look for
Attracting investors means demonstrating your business potential and capabilities - what investors are really looking for in early-stage pitches and why your personal story and skills are just as important as your business idea.
take a step back and think ‘what do I need to know about my business potential, what information is helpful for me’. Often we build a pitch we think investors want to see, but honestly at an early stage, the majority of the decision to invest is about you and your capabilities.
Early stage investments are high risk, investors know this, so investors want to know if you have what it takes to give this the best possible shot. So if this is an investment in you, what do you need to know about your business and the market that you operate in?
Try to picture yourself as an investor, if the table was turned, what questions would you ask? Thinking about it this way can provide helpful context and guidance to move you forward. At an early stage, your pitch is simply acting like your CV, it's the tool to get you a meeting.
Often less is more and clarity of message is key. Don’t over engineer the information, you need to be crystal clear and focused on what you are doing, why you are different or what is the opportunity and why you are the person to take this forward? In addition you’ll need to be clear on what you need financially or otherwise and who you are looking for but again keep it simple, if you get a meeting, then you can dive into detail.
Lesson 4 - When it comes to raising funds, you need to be in the driving seat
There are plenty of people out there who will pitch you the dream, tell you they can connect you with investors and solve all your problems for a fee. Just be aware, every week I get at least one or two of these types of pitches. I rarely have the time to check any of them out to see how credible they are but let me tell you, seldom is the fact that anyone can raise on your behalf.
However these are the top 3 ways I believe others can effectively help you:
1. Help you understand the fundraising process and the landscape
2. Help mentor / coach you to understand your vision so you can be confident in your pitch
3. Help make warm introductions and recommendations on who to approach
In short, there are rarely quick fixes to funding and it is a process that takes an incredible amount of time and energy. But it can be fun and rewarding with the right support and right mindset. The founder of Canva Melanie Perkins had to do over 200 investor pitches to get her initial backing, yes it can be tiring but I am pleasantly surprised about the amount of good support there is today in the UK if you start to look.
I’ll leave it there for today Mobsters as there is so much more we can dive into, but know that support is out there, you just need to go looking. If anyone here needs help and guidance then feel free to connect with me or drop me a message, it would be a pleasure to hear from you.
Each week I’ll build on the last, aiming to add as much value as I can to the wonderful Mobster community. If you have specific questions or business topics you would like me to cover, feel free to ask in the comments and or add your own thoughts on these blogs. I’d love to connect with you and hear your stories.
Until next time Mobsters.
Best
Francesca
Bonus section:
Funding terms:
General VC and Startup Terms
VC: Venture Capital
PE: Private Equity
IPO: Initial Public Offering
M&A: Mergers and Acquisitions
B2B: Business-to-Business
B2C: Business-to-Consumer
SaaS: Software as a Service
ARR: Annual Recurring Revenue
MRR: Monthly Recurring Revenue
CAC: Customer Acquisition Cost
LTV: Lifetime Value
TAM: Total Addressable Market
SAM: Serviceable Addressable Market
KPI: Key Performance Indicator
Fundraising Rounds
Pre-Seed: Earliest stage of startup funding, often backed by ‘Friends and Family’ so a ‘Friends and Family’ round may also be a term used.
Seed: Initial capital used to start building a product or business
Series A, B, C, etc.: Funding rounds as the startup scales
Angel: Investment from an individual investor (Angel Investor)
VCF: Venture Capital Fund
Bootstrapping: No funding, investing your own funds to get a business off the ground.
SEIS: Seed Enterprise Investment Scheme
EIS: Enterprise Investment Scheme
Crowd Fundraising: Platforms to connect you with investors or backers by sharing your pitch
Financial Metrics
EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization
ROI: Return on Investment
IRR: Internal Rate of Return
MoM: Month over Month (growth)
YOY: Year over Year (growth)
CapEx: Capital Expenditures
OpEx: Operating Expenses
COGS: Cost of Goods Sold
DCF: Discounted Cash Flow
P&L: Profit and Loss
Deal Terms and Legal
ESOP: Employee Stock Option Plan
SAFE: Simple Agreement for Future Equity
CAP Table: Capitalisation Table
NDA: Non-Disclosure Agreement
LOI: Letter of Intent
DD: Due Diligence
SLA: Service Level Agreement
Term Sheet: Non-binding document outlining investment terms
Investor Classifications
LP: Limited Partner (investors in VC funds)
GP: General Partner (managers of VC funds)
HNW: High-Net-Worth Individual
FO: Family Office
CVC: Corporate Venture Capital
VCF: Venture Capital Fund
Exit Strategies
IPO: Initial Public Offering
M&A: Mergers and Acquisitions
Startup Ecosystem
Incubator: Organization that supports startups in early stages
Accelerator: Program to expedite startup growth (e.g., Y Combinator)
Unicorn: A startup valued at $1 billion or more
Decacorn: A startup valued at $10 billion or more
Scaleup: A rapidly growing company beyond the startup stage
who is mobster francesca?
Hi, I am Francesca Hodsgon, Founder of We are Ambition and mum to Oliver and Harry who are now 11 and 7. I am an exited tech founder on a mission to help millions of people find mental clarity and to inspire and support business leaders of the future.
It's a pleasure to be a guest writer and resident business coach for The MOB (Mums Who Build). Every Monday I will be sharing my blog to help motivate and inspire you to build the life and future your want in motherhood. If you have a question you can drop me a DM anytime.
WHo are mums who build? (the mob)
Founded in 2023 by two east london mums rebecca coxshall and georgie harris.
the MOB (mums who build) is the community enabling mums to build the life and future YOU want in motherhood.
We do this through:
Wellbeing;
Connection; and
Financial Fitness
But it's so much more than just a community. It's an attitude, it's a lifestyle; it's the team that will be championing you through motherhood and life. So whatever it is your building - a business, a career, something else, join our free community today to find out more about how The MOB can support you to build the life you want. Motherhood is wild - we're stronger together and it's a hell of a lot more fun!
If you are able to get to London, we'd love to meet you! Come down and see us in person at one of our events. The MOB also hosts regular 'Mobster Hangouts' - free mum meet-ups (kids welcome) - weekly in Walthamstow and monthly in Stoke Newington, full details of these are on the Events page.
Got a question for us? Drop us an email: mobster@mumswhobuild.com
