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‘Strategic Fit’ Crucial in Startup Success

Updated on August 1, 2018
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Angelique is a London-based entrepreneur, writer, and traveller. Her cup of tea includes business, finance, health, media, art and politics.

Raising funds for startups is hard due to different factors. Now, experts are claiming it all boils down to “strategic fit.”

Financial Express reports that in a survey, 30 percent said that “strategic fit” is a crucial factor in attracting investors, with following up on funding, the deal’s commercial components, the brand’s strength, network, individual partner expertise and personal relationship trailing behind.

But first, what’s with the buzz about “strategic fit"? BusinessDictionary.com defines it as a situation where a company, a project or a product is suitable for the objectives of a particular organization. In terms of investments, a lead investor must be a strategic fit in order for the entrepreneur to access the funds right away.

One of the disruptors in the industry is Digital Arts Media Network, Inc. (OTCMKTS:DATI). This makes the company a strategic fit for startups and entrepreneurs. The tech accelerator uses the Public Accelerator-Incubator model, the first of its kind in the world. DATI does not take the conventional route to provide support to startups. It doesn’t provide mentorship or guidance but rather assists in expediting capital formation. Its recent endeavors, including its venture with truCrowd, reflect its mission to help startups to succeed.

DATI collaborated with truCrowd in order to reach target audiences faster. The two companies share the same vision: to connect startups and emerging businesses with accredited and non-accredited investors. truCrowd has over 6,000 registered users and one of the first to have SEC permits.

“Our primary function as a PAI (Pubic Accelerator-Incubator), is to expedite capital formation for startups, accelerate liquidity for investors, and provide disenfranchised investors access to the caliber of tech startups, normally only reserved for the rich,” Digital Arts Media Network CEO Ajene Watson explains.

“truCrowd aligns perfectly with this mantra and ties directly in with our end-to-end service offerings. We anticipate that we’ll facilitate roughly a dozen high-valued, high-growth, startup opportunities that will prove our business model and ultimately contribute nicely to our portfolio of startup companies,” he added.

Getting a lead investor is crucial in every crowdfunding campaign. With truCrowd in the fold, DATI’s clients can now enjoy faster access to capital. As such, gaining access to funds means achieving returns on investments faster. DATI believes everyone should get their fair share of the pie. This means that even non-accredited investors can get a chance to invest in companies that they think have massive potential. It is important to note that it enhances the current accelerator and incubator setup and not pose a challenge to it.

When it comes to being a strategic fit, women can find comfort that crowdfunding platforms offer a higher chance of getting funded. A study claims that women entrepreneurs have bigger chances of getting support from crowdfunding platforms compared to venture capitalists. Forbes reported that among the 19,000 seed crowdfunding campaigns in the U.K., only 20 percent of male-led campaigns reached their targets while 26 percent of women-led campaigns met their goals.

This makes the process of choosing which platform to raise funds vital. The Crowdfunding Centre founder and CEO Barry James says there is a need for a shift in mindset for the venture capitalist sector.

“It would turn out that women would, immediately and decisively, outperform the men, across the board, shining a new light on the endemic imbalance and the causes that have long fuelled limited access to finance for female entrepreneurs via traditional financing routes,” he suggested.

Women need not worry about the lack of platforms to get financial support from. With DATI and truCrowd, investors will get to take a look at some innovative ideas while entrepreneurs get fast-tracked funds to help them grow.

In the end, having the right “strategic fit” helps all the parties involved because it reduces the unnecessary wastage of time and resources crucial to the success of startups. Faster access to funds means faster implementations of steps such as marketing and branding. Return on investment is key for investors; the faster they get returns, the more inclined they will help again.

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