How to Find Investors for Your Startup
So you want to learn how to find investors to fuel your startup's growth.
By now, you’ve already established a small team and a solid business plan.
You’re feeling optimistic that there’s a place for your business amidst the competition, and you need an investment to take your startup to the next level.
Now you’re likely sifting through countless ideas on how to find investors for your start-up business.
Even though you have the option to seek financial support from friends or family, not everyone is thrilled about the idea of financing your venture.
So why not ask for funding from total strangers?
If some people think your business plan is fantastic and have faith in your mission, shouldn’t you reach out for their support?
The good news is that a number of venture capitalists and investors around the country are searching for opportunities to fund startups and small businesses just like yours.
As a matter of fact, approximately 63 percent of angel investors are living outside of Silicon Valley, New York, and Boston.
So you can just imagine how many angel investors are available to take on new investments.
For those living in the U.S., the Small Business Investment Company program is a good place to start.
This program is run by the Small Business Administration, assisting small businesses and start-ups to find worthy investors.
However, it’s important to remember that venture capitalists and investors alike receive a plethora of business pitches every day.
So if you want an investor to choose your company, you’ll need to stand out.
In short, you have to make an effort to impress them.
How To Impress Investors For Your Startup
Initially, the best way to attract and keep investors engaged with your business idea is to come up with a thorough and strategic communications plan.
A well-executed and continuous PR effort will not only help increase your credibility but also generate a positive report.
You’ll effectively nurture potential stakeholders’ excitement as they read reputable news outlets churning over the key developments and accomplishments of your startup.
It’s also ideal to keep a clear head while focusing on your vision.
Potential investors are practical and want to see outcomes. They’re interested in the results your startup will produce.
Make your idea clear and explain it in the shortest time possible.
Also, don’t forget to correct the trajectory when necessary but avoid doing so repeatedly.
Tips For Choosing The Right Investor
As you’re looking for investors, you have to determine which ones understand the challenges and believe in your vision.
In other words, it’s highly recommended to go after an investor who is knowledgeable and seasoned enough to help your business grow by leaps and bounds.
Consider what the investor will contribute — besides currency.
Here are a few things you should keep in mind before closing a deal with a potential investor:
1. Don’t Settle
As you’re choosing investors, you should diversify and search through multiple mediums.
Normally, schools with strong entrepreneurial and business courses have a great network of investors from their alumni and faculty who can point you in the right direction.
Other than that, you can also choose to join angel investor networks.
Typically, these online networks are member-based and organized depending on the location of each member.
Most of the time, these networks operate from a fund that has been left behind by an investment firm to source deals for the network.
Funding applications on angel investor networks are pre-checked by a group of licensed and regulated professionals.
Subsequently, company founders are given offers by a number of investors for a single venture instead of going individually from angel to angel.
Also, remember to think global even if you’re local.
As you search through a wide range of online platforms, you’re making yourself available to accredited investors shopping for opportunities to finance new businesses.
Depending on the places you choose to pursue your connection, you could be seeking an investment from either an individual or a group.
Apart from signing up on online networks, you have the option to join crowd-funding platforms, regional tech, and start-up groups.
You can even apply to accelerator programs in an effort to find the right investor.
2. Your Investor Is Your Partner
As you’re choosing an investor, you should remember that you’re selecting a partner.
You need to go in with this approach and visualize yourself spending substantial time with this person.
Like you and me, investors are people.
While they’re capable of boosting your bank account, you should consider the things you want to gain from your partnership, besides the financial backing.
Also, assess any specific value gaps that an investor can help fill and recognize his or her potential to do so.
Similar to finding a good first date, you should also perform a more comprehensive and less traditional reference-checking about your potential investor.
A negative entrepreneur reference is always a massive red flag, regardless of how much money the investor is willing to put on the table.
While you’re normally on the receiving end of questions when meeting potential backers, it’s always best to turn the table and ask more questions about investors’ roles, expectations, and previous experiences.
This is an excellent way of preventing conflict and other issues regarding your investors’ level of involvement in the future.
Ideally, the best investors are those who can take the role of a willing backer and a sensible mentor to promote business growth.
3. Educate Yourself
Business is complicated enough.
Bringing in complete strangers makes it even more complex.
In order to adjust smoothly, it’s always good to know the resources and assets different investors can provide, as well as the technical side of what they can offer.
Investors want to completely understand the vision and mission of your project.
However, it’s essential to note that the idea is to make all details easily consumable for them.
One of the best ways to achieve this is to establish a story around relatable details and present it in a context that works with your idea.
More often than not, potential investors will ask whether you’re looking for full-seed funding or angel funding.
This is the question you’ll need to answer right to help close a deal.
In most cases, start-ups and small businesses alike opt to take funding from a single investor to not only create a meaningful relationship, but maintain a significant amount of equity.
The right investor will be more than just a walking bank account.
These are people who can help you oversee your infrastructure, provide capital, and offer provide guidance without contesting every decision you make.
Knowing how to find investors for your startup means keeping these tips in mind.
If you need help drafting something to share with investors or want to begin publishing authoritative, SEO-boosting content to make your business a more appealing investment, feel free to reach out to the team at No Strings Content.