Fundraising Preparation
Last updated
Last updated
Fundraising is a critical part of turning your blockchain startup idea into reality. In this stage, you’re preparing to gather the financial resources necessary to bring your product to life. This involves demonstrating commitment, building a compelling narrative for investors, and finding initial sources of funding that align with your project. Here’s a detailed look at each step involved in fundraising preparation.
Please note that this sub-section covers some preparation for fundraising; however, there is a dedicated section on that goes into much more depth. This page links out to the relevant sub-sections.
Bootstrapping is the first step towards establishing your startup. This may involve asking family and friends, but be mindful not to over-extend your requests.
Use personal funds: At this point, you and your co-founders should pool your personal resources to cover initial costs like setting up the business, building a prototype, or creating the first version of your website. In the beginning it may just be you as the sole founder. There is no need to go crazy spending here.
Demonstrate commitment: Investors are more likely to trust founders who have "skin in the game." Some use of personal funds shows that you have confidence in your project and are willing to take on initial risk. However, most input at this stage will be sweat equity. Working to build a product goes a long way. For non-technical founders this is harder.
Cost management: Minimize costs during this stage by focusing on essentials. Identify areas where you can reduce expenses, such as using open-source tools, remote work, or collaborating with other teams.
Grants are a non-dilutive way to secure early-stage funding, especially within blockchain ecosystems. Grants often come from specific blockchain foundations or initiatives that aim to boost development in their ecosystem. For a deeper dive, see the section.
Ecosystem-specific grants: Apply for grants from ecosystems like Ethereum, Solana, or Polygon, depending on the blockchain you've chosen.
Research grant programs: Most ecosystems have programs for projects that contribute to their growth. Spend time researching and aligning your proposal with their objectives.
Align with the ecosystem: Highlight how your project will contribute to the success of the ecosystem you’re working in. Be clear about the value you add, such as expanding the user base, creating tools for developers, or introducing new use cases.
Working prototype: If possible, develop a working prototype to support your grant applications. Showing progress increases your chances of securing funding, as it proves your capability to deliver.
Resist temptation: Many grant programs allow you to apply multiple times, which can be useful for building runway by receiving funding for the same or different products. However, relying too heavily on grant money can lead to complacency and a lack of urgency. This can ultimately hinder your ability to secure larger rounds of funding and execute a successful token sale.
The whitepaper is a comprehensive document that explains your project to potential stakeholders, including investors, community members, and partners. More details can be found in the dedicated subsection on creating a .
Define your vision: Your whitepaper should clearly outline what problem you're solving, your vision for the project, and why it matters.
Include technical details: Blockchain projects often include unique technological components. Explain the core technology behind your product—such as smart contracts, consensus mechanisms, or scalability solutions—and how it stands out.
Case studies and use cases: Include practical use cases to demonstrate how the solution will benefit the target audience. It should explain the user journey, technical workflows, and how value is generated.
Review past successful whitepapers: Use existing successful whitepapers as templates. Analyzing how others have effectively communicated their vision can provide a useful framework for your own writing.
Problem and Solution: Clearly articulate the problem you're addressing and your unique solution. Make sure it is understandable to both technically-minded investors and those without a technical background.
Market Opportunity: Provide insights into the potential market. Include data that illustrates the size of the market, growth potential, and trends that make your solution timely and relevant.
Team: Introduce your team and their expertise. Investors often invest as much in the team as in the idea, so highlight relevant experience, past achievements, and skills.
Roadmap and Financials: Outline your project milestones, expected timeline, and the funds you need to achieve them. Provide financial projections to show how investment will be used, with clear timelines for fundraising rounds.
Iteration and Feedback: After initial pitches, take feedback from potential investors to improve the deck. Ensure each iteration becomes more refined, concise, and convincing.
Storytelling: Investors are drawn to compelling narratives. Practice telling the story of your project in a way that captivates your audience. Start with why your project matters and what makes it different.
Refine continually: Fundraising documents (whitepapers, pitch decks) are iterative. Continue to refine based on feedback from advisors, peers, and initial investor conversations.
Build relationships early: Start engaging potential investors well before you need funding. Build relationships by keeping them updated on your progress, which will make them more inclined to invest when the time comes.
Practice the pitch: Before reaching out to investors, practice pitching to friends, mentors, or colleagues. Refine your presentation based on their questions and feedback.
Fundraising preparation is all about creating a solid foundation that will make investors confident in backing your project. By bootstrapping initially, leveraging grants, crafting a strong whitepaper, and designing an effective pitch deck, you’ll be in a strong position to secure the funding you need.
The pitch deck is a concise presentation designed to quickly convey your project’s potential to investors. This is one of the most important documents to get right, so it is worthwhile to see the template and further details within the dedicated subsection.