Where to Find Startup Investors for Your Business
Most of the leading companies around the world had humble beginnings but with the right startup investors, it was possible to scratch the surface. A few years ago, it was very difficult to start a business from ground up because of the lack of monetary support from investors. But that has drastically changed today.
Investors are identifying the potential in right startups to support the innovation. According to Statista, investment in startups has become popular in recent years, with startup funding across all industries increasing by around 50% between 2012 and 2017.
New startups are arising and bragging million of dollars in venture capital (VC).
You might be having an innovative idea for a product or confident about being competitive in the market. But regardless of everything, you need funds to manifest it into reality.
Below are the most efficient ways to find investors for your startup.
· Use your network
A lot of people are looking for investors and delivering so many pitches. Investors are more likely to favour the startups that are introduced to them by a known person.
That person can be a friend from school or college, people you have worked with, or a relative. Broader the network, more are the chances of having someone in contact with an investor.
If you find even one person who is in contact with investors or works in an investment firm, it would become easier for you to at least begin. Meet that person and share your startup idea along with its advantages. That person should feel that the deal will benefit both, you and the investor. Then, ask him/her to introduce you to the investor.
You can also first decide the investors you want to reach out to and then research if you know someone working at that investment firm or if that person knows any of the board members personally or professionally.
· Talk to people in your industry
Another idea is to find the new companies which are in the same industry as your startup. Attend meetings and conferences around you to get involved with founders of those companies. Connect with startup groups and founders on social media.
Be humble and talk to them and learn how to find right investors. Many investors are specific about industries, like retail, software development, travel, etc. This will help you narrow your search for investors. And who knows, the person you are talking to might recommend your name to an angel investor.
· Leverage startup launch platforms and angel networks
Nowadays, there are platforms dedicated to helping startups find the right investors. These platforms offer information and assistance according to the industry and requirements.
You can also find investors from angel networks. The angel networks are based on angel investors that serve by location. Along with the investment, the angel investors provide mentorship, advice, and access to their network.
To easily connect with angel investors, it would be better to create an AngelList profile. This profile should include information about your company, products and employees. This will help you in landing meetings with investors. If they like the idea, you might end up getting offers from multiple investors too.
· Create a list of right investors
There are thousands of investors out there. If you randomly approach one by one, you’ll end up wasting your valuable time. Do thorough research and create a list of investors that align with your ideas, industry and business goals.
From those thousands of investors, you have to include only 30 to 50 in the list. If the list doesn’t suffice, you can always add later. Prioritize the investors in your list who can be the most beneficial for you.
Once you have created the list, connect with mentors to learn what investors want from a startup, or how you should land a meeting with them. The mentors can be your friends with established companies, financial or investment experts, or influencers. Their experience and guidance can help you with navigation.
· Craft a quick and effective pitch
While reaching out to investors, keep this thing in mind that some investors don’t even get enough time to check their emails properly. Chances are that they receive a lot of requests every day for investment. If this is the case, you have to keep your email short, to the point and genuine. Your email shouldn’t sound like you are sending the same to every investor.
If you have successfully landed a meeting with an investor, it doesn’t mean they will invest in your idea for sure. In the meeting, you get a little time to present your idea and grab their attention. Be prepared with a quick and effective pitch that is succinct and powerful. Your aim should be to make everything very easy-to-understand for them while being thoughtful and selective.
The way you want right investor, the investors also want to invest in right startups. When they listen to your idea, they should feel that the investment will bring value to them.
· Be prepared for rejection
Be prepared to hear ‘no’ a lot when finding an investor because you are asking people to raise money for you, which is a risky business. If you approach all the 50 investors in the list, chances are you might get a ‘no’ from 40 of them. And from the remaining 10, 5 might say ‘maybe’, while other 5 can give you a ‘yes’. Or maybe all of them reject your proposal.
You will get rejections from many of them, but you end up learning a lot of things from them like what they want in a company to consider the investment, what’s missing in the idea, what needs to be reconsidered to build the better MVP. In initial meetings, you might not be having answers to certain questions, but you can learn from that and be prepared for the next.