The Art of Startup Fundraising. Alejandro Cremades

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      ■ Making key hires

      ■ Building a board

      ■ Prototypes and beta testing

      ■ Launch of a minimum viable product

      ■ Expanding early adopters and users

      ■ Gaining revenues

      ■ Proof of demand and potential for scale

      ■ Breakeven point

      Entrepreneurs should be focused on raising the capital to make it to the next milestone and round of funding. This amount should include a cushion for overages, and a budget for marketing for more funds. Work toward each milestone and give it the proper attention, even if you have the long goal of an IPO, buyout, or putting a legacy business on autopilot.

      Breaking Even

      While there are many milestones in the process of launching, nurturing, and growing a startup, the breakeven point cannot be overlooked. Let's be honest – until the breakeven point is reached, all income is burned cash. (And that even applies when the numbers are in the tens of billions of dollars.) But once the breakeven point is reached, startup founders can then negotiate from a place of power, and they technically don't need another outside dollar. However, additional funding can certainly help. That money can be funneled into real growth, and maximized.

      It is important to note that many of the biggest companies, and those that have attracted major investment, still haven't achieved the breakeven point. It isn't a prerequisite for raising capital. Peter Thiel tackles this issue in his book Zero to One. He reminds us that the real value of a company, and how savvy investors view opportunities, is the future value of cash flow. If you aren't breaking even today, when will you be? How much future cash flow can investors buy into? What discount are they getting by buying into that cash flow now?

      Expectations of Investors

      What are the expectations of investors? Unless startups know what investors expect and are looking for, it's hard to give the right signals, prepare, and position your company to be the recipient of funding. So what do investors really want? In asking this question, it's often easiest to first address what they don't want, which is:

      Everything else, including expectations, circles back to avoiding these two pain points. Some expectations may be arrived at naturally and individually. Many others are line items that investors believe they need to check off. But they all come back to avoiding these pain points. Here is a list of the 19 items that investors want and expect: