You need to have a clear plan for how you will use the capital you raise. Whether that is to boost revenue, reach critical impact metrics or even just fuel growth.

You should also be well into networking if you want to find investors. This includes attending industry events and setting up informational interviews.

1. Be prepared.

Having a solid understanding of your business model and financials, including long-term strategic plan, is critical before seeking investment from investors. This includes knowing all the metrics and data that impact your customers and revenue.

It is also important to be prepared for questions from potential investors. This can include describing the company’s value proposition, market analysis, product or service, and business model. It is important to have this information ready in advance so that you can answer these questions quickly and confidently.

You should also be familiar with the different types of funding options available and which ones best suit your company’s needs. This includes equity crowd funding, federal grants and angel checks. Additionally, you should consider partnering with an expert financial professional to ensure that you are meeting all of your legal obligations.

2. Be realistic.

Once your startup has gained traction and proven product market fit, it is time to consider raising investment capital. Startups typically need an injection of funds to accelerate growth, acquire key talent and bring new products to market faster.

Obtaining a capital raise is a high stakes game. In the current fundraising landscape, the demand for startups seeking capital significantly outpaces available resources.

To help you secure a deal, it is critical that you thoroughly understand your company’s funding needs and how much capital you require to achieve your business goals. Investors will want to know that you are leveraging their money wisely and can realistically generate returns on their investment. This will increase their willingness to support your startup. In addition, be sure to create financial projections that are accurate and reflect your company’s stage of development.

3. Be honest.

For many startups, a key touchpoint is the need to raise capital. Whether through angel investors, venture capital firms, crowdfunding or business loans, it is a vital step in growing your startup.

Having the right capital infusion can help your startup accelerate growth, take advantage of opportunities and increase market share. This type of financing usually gives investors equity in the company, so be prepared to give up some control of your business.

Some entrepreneurs choose to fund their startups with personal savings, a loan or even dipping into retirement assets. However, if you can demonstrate strong traction and product market fit, it makes more sense to go after investor funding. This is often the quickest route to getting your startup funded. It will also provide more credibility with prospective investors.

4. Be flexible.

One of the most important aspects of business is being flexible. This means reassessing goals and plans often to adapt to changes in the environment. Being flexible can also improve resilience, reducing stress and anxiety by eliminating the need to cling to rigid planning models.

If your startup is still a very early stage, try to time raising capital when demand starts picking up. This is an excellent indicator that you have found product-market fit and can start generating revenue, making your company more attractive to investors.

Get a head start on networking by attending industry events and building genuine relationships with people who can introduce you to investors. You can also use small business loans or a 0% / low interest APR business credit card as early-stage funding options for your startup.

5. Be strategic.

Raising institutional funding for your startup is a big task that will require the founders of the business to dedicate a considerable amount of time towards. They will need to delegate many of the other day-to-day operational tasks to trusted colleagues in order to make room for fundraising activities.

According to Aleksey Krylov, an experienced fundraising consultant, institutional investors will want to see a strong team and passionate product, as well as a clear plan for the future of the company. This is why it is so important to have a well-prepared pitch that highlights your unique value proposition and scalable business model.

It is also helpful to have a list of potential funding options, including bank loans, venture capital firms, and angel investors. This will allow you to compare the pros and cons of each option, such as repayment terms, equity dilution, and control over the business.