Entrepreneurs and startups eagerly look for great investors to invest in their business. It is not very easy to find the right investor for your startup. There are several ways you can find an investor and collaborate with them to boost the business. At this stage, I can assume that your startup idea has grown and you have a great business & marketing plan ready. What is the next step after that? You should look forward to raising capital and actively find investors. Here are some different ways to find different types of investors.
Find someone within Friends & Family
Before exploring the world, you should look for within family, friends, and relatives. They can be easily convinced with your idea and help you to raise funds. This financial assistance from friends, family and personal savings can be very helpful to grow your idea in the initial stage. Not only invest in the idea, but they can also provide you moral support. However, you should make sure that if your idea does not succeed, it should affect your personal relationships. If friends and family have the right skills, they may help you in operations and marketing as well. Even if you are attracting friends and family in the initial stages, you should still prepare a detailed business plan and see how they fit in the plan. Many times, it is safer to get up to $20K for your start to build the MVP from your family/friends. They will be more willing to bet the money compared to outside investors.
Use Crowdfunding Platforms
Another way to find investors is to take your idea and go online. The online community is vast and you can get exposure from the whole world. The online platform is open for everyone and you can get funds from anyone. Typical investors on Crowdfunding platforms are high-income people. Some of the popular crowdfunding platforms are Kickstarter, GoFundMe, IndieGoGo. You should read their policies in terms of what equities they take and how they will manage the funds if you get funded. Before adding your campaign, you should also learn what marketing content you need to prepare for the particular crowdfunding platform. There are some freelancers who are experts in crowdfunding campaigns and can tell you how to run your funding campaigns. These networks allow you to attract investors from around the world and also help you to market your idea. A strong pitch, product/service details with infographics may attract people to contribute more to your business.
Go to Pitching Competitions
You can go to several pitching competitions to raise money for your startup. Great thing is that the money you win from pitching competition is non-dilutive. Every year several pitching competitions happen, you should find the one closest to your area and go. Pitching competitions are great to meet angel investors, VCs and mentors as well. Don’t be afraid of disclosing your idea to the world. Expert feedback is also important in terms of improving your idea and growing it. You can have exposure to build strategic partnerships and attract media and receive unexpected funds. Prepare a simple but powerful pitch and present confidently in such competitions.
Network Building Through Top Tier Business Schools
A business school close to your location is a good source to find investors. Generally, business schools run several programs related to startups funding and investors. They also do several pitching competitions and investors networking events. You don’t have to be an alumnus to go to those events, you can just contact the entrepreneurship cell in the business school to find more information.
Leveraging your Linkedin Network
All investors have profiles on LinkedIn. They even mention what types of investments they like to make and what types of projects they have funded in the past. That is great information for you. You can just search for investors in the local area, select on few suitable investors and connect with them. You can email them and get an in-person appointment to see if they are willing to invest. You should also ask for a recommendation from anyone in your network about investors.
An angel investor is generally a high net worth professionals who provide financial backing to the small or early stage of startup and entrepreneurs too. Angel investors can be found among an entrepreneur’s family and friends. Typically, angel investors or seed investors can invest between $10000 to 2 million in your project.
AngelList and Microventures
AngelList is another great option where you can create a profile and find investors for your startup business. On this platform, Investors also learn about you and your product/services to invest in. You may receive deal by deal investment or one-time investment by professional investors. If you are an early-stage company, Microventures is another website where you can get investments. On Microventures, you may receive investments from Angel investors and institutional buyers.
Find VC Firms
You need VCs at the later stage when you have proved your idea and product and you need to grow it. If you are at that stage, you should VC firms that are aligned with your business. First, you need to find our which VC firm is a good fit for your company goals and then prepare a list of VC firms who invest in a business like you. As an active fund seeker, you should also look at investment ethos and criteria decided by VC firms since they focused on a certain group of sectors so you need to check if you are qualifying or not. Identify how much amount you need and the stage of your startup. VC firms are very professional and they do their due diligence before investing. They only invest in a startup where they see the potential to grow and make returns on investment.