Before you take a step towards getting investors on board for your startup, you need to be certain that you are ready – ready to share your company’s or project’s equity by 25-33%. You can consider yourself ready to get investors for your startup if you have the majority of following 5 points on your side:
- Financial performance: High returns is what investors look for in a startup. Your project representative need to plan an annual strategy in a way that an investor knows about the company’s budget for a year, how and where they are going to spend the funds, and how much will be the returns. They need to be sure that what they are investing in is capable of giving them handsome returns.
- Unique Selling Point: Nothing sells unless it’s unique because otherwise, the market will be over crowded with already existing products. People don’t agree to buy/use a new product/service because of trust issues. So firstly, think of a USP for your product and then try builder customer trust over that by doing the right things.
- A good market size: if your product is catering a small target audience, investors will most probably not fund that startup for you. Make sure that the idea of your startup is big and the audience is even bigger.
- Experience in the industry and ample knowledge: Investors don’t want to risk their funds on an inexperienced team. The owner of the company must know about its competitors and have a solid goal to achieve years from now. The team that he leads has to be efficient, experienced, good with deadlines and loyal, most importantly.
- An effective business model: investors needs to see the future by looking at an overview of your business. Present your business model in a way that it convinces the angel investors that your company will grow with time, may be gradually, but effectively! Idea pitching is where you get all the investor interest from. You make a mistake there and you screw your chance.
It’s important for the CEO of the company to be coachable. He must be willing enough to learn from the critics he gets along the course of project building, delivery and maintenance. Investors are funding your project so they will give suggestions of their own which they really want to implement. In return, if you do not care to listen or defend the existing product, it might not be in favor of investors.
If you are sending your project proposal to a list of angel investors and venture capitalists, make sure you are not just forwarding the plan and waiting for a good response. In order to get what you want, you are supposed to communicate well. Prepare custom projects for each investor where you mention things that the funding guy would like to see. Portray well that you know about him well, show your keen interest in getting him the benefit of funding you, and most importantly, do whatever that will build your trust in him. To get investors for your startup, it is better that you begin with people you know or have already be in contact with. Approach those investors with recommendations rather than by surprise!
Now that you know enough about when to get investors for your startup, you are ready to learn ways how to get them.
Get your startup registered at startup launching platforms
There are incubators across a lot countries that hold startup weekends, where they give you a platform to showcase your product in front of a panel of judges and investors. Get your startup registered there and pitch the idea in the greatest possible way. Apart from the incubators, there are a lot of companies as well who do this for emerging entrepreneurs so that they get investors easily.
Sign up on crowdfunding sites to get investors for your startup
There are crowdfunding sites that direct you to the type of investor you would want for your startup. Every site works differently so you need to research well before you begin working.
Work with incubators or accelerators
How babies grow inside an incubator is how your startup needs to grow. Like a baby! It needs to have special services of mentorship, technical advices, workshops, healthy working environment and a network to get mature and establish. These places hardly take anything from the startups and provide a higher benefit ratio to their end.
Build a profile for angel investors
Create an extensive profile of your team where you mention special skills of each one of them, what your company is about, and your products. Creating your profile is a great way to let investors learn about you. Once you have created our profile, it’s time for you to get references from influential people, a lot of sharing on social media and other related platforms, and with authorized professionals.
Make a list of investors you actually want to meet
You will end up having multiple versions of your excel file for that matter after which you will finally stick to the last edited list of investor you want to meet for your startup. From a list of 500 people, you might get down to just 10 of them and that will entirely be based on how much you have researched about them. You need to see among those 500, who will be the most beneficial for you. That’s a true Angel List for you.
It is important to understand that rejection and failure is the first step to attain success. It is actually abnormal to not get a rejection on what you are showcasing to hundreds of different people. Learn to hear Nos from people, this will make a yes sound quite exciting and amazing. In the course of your struggle to get investors for your startup, keep in mind that a good pitch gets a good fund and hopes are what you always want to keep alive!
Good luck, fellows.