In today’s time, finding an investor for your startup is much easy than you think. In fact, many successful entrepreneurs believe raising money isn’t the hardest job in a startup. If your idea is good enough and you live in a developed city, you can easily talk to 40–50 investors. So, in this article, we will discuss some points on how to find investors for startups.
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
-ROBERT G. ALLEN:
The most common mistake people make is to pitch their idea to everyone. You need to shortlist investors on the following criteria:
- Someone who works in the same field or wants to expand in that field.
- One who is willing to shed some wisdom in developing the company.
- Lastly, who can settle to a reasonable financial agreement that suits all parties!
To impress such an investor, you need a quality idea, well-crafted pitch with a realistic business plan, and a lot of research which shows best- and worst-case scenarios.
A key aspect that people forget is showing traction or progress in your startup. Anyone can have an idea, but you need to show investors progress in your startup.
For example, if you are providing a solution to a problem, conduct a survey showing your idea can solve the issue. Or if you have a startup, develop a prototype with the help of your friend. These steps show investors that you are up for work. Once this is done, you can approach investors.
Here’s How to Get Investors for Startup -
1. Through Top-Tier Business Schools:
Every top business school has an entrepreneurial program. You can contact them and pitch your idea. They generally have a strong network of successful entrepreneurs and investors. They can help you craft your idea in a proper format and raise funds.
2. Apply to Accelerator Programs:
A lot of investment firms, universities, seed funds offers accelerator programs. These programs are spread throughout the globe. Some of the famous accelerator programs are Techstars, YCombinator. However, the competition is tough, but the payoffs are huge.
These programs are weeks or months long, and their sole purpose is to make your startup better. They help raise funds and shape your business model to suit the market. You can also meet other founder and veterans to exchange ideas and smooth out some rough edges in these programs.
3. Attend Startup Events:
If your startup requires a lot of seed funding. Then we suggest you attend a lot of startup event near you. These functions are a great way to interact with investors and increase your networks. You can also find mentors in such event which can guide you in your startup. However, you need to be careful not to reveal much as these are rich people who can steal your idea and make it their own. Hence, you need to disclose less and impress investors.
4. Through Your Industry Friends:
If you know any friend, who works in a startup or in a company who has shown interest in funding a startup. Then you ask your friend to arrange a meeting with the heads of their company. However, you need to pitch your idea to a person who is interested in your startup market. Here you can also get some ideas from them on how to find investors for startups. For example, pitching an educational idea to a textile company or startup will end in no for most cases. Even if they say no, you can ask them for someone else who is open to investing in your sector.
5. Apply in Government Program:
Many governments across the world are providing funds to startups. France and India are the latest government who have launched a program, where you can raise funds easily. There are two types of Programs. One is where the government invest themselves in the startup, and second is where government arranges a meeting with investors who have to invest a certain amount of money in startups. You can also get seed funding if your idea is good enough.
6. Crowd Funding:
You can find many crowdfunding platforms on the internet. You can upload as many details as you want about your startup and then ask people to fund your startup. These also act as a marketing stunt as you can create interest among the public for your company. This is a double edge sword, as anyone can pick your idea and make his own. However, if your product has a secret algorithm or product, then this is one the best way to raise funds and publicize your product.
7. Using a Network Connection:
The prominent network builder is LinkedIn, you can connect with entrepreneurs and mentors who are open to invest and help people. This is a very tedious job as you need to have a long list of connections to lure people towards your ID. However, it is one of the simplest ways to find investors online. You can get Email ID using Linkedln and BlueTie and then hustle your way to a meeting.
8. Online Startup Portals:
The internet is filled with Startup portal, you can enter the details of your startup on these portals. These portals are often opened by Angel investors who search for companies to make an investment. You can also connect with other founder using these portals and discuss plans and even collaborate to grow bigger and faster. You can find tons of such portals if you build your profile in a professional manner. You are likely to receive more than 10–12 calls from investors or mentors. This is an effective and safe way to get your idea outside with less risk of plagiarism.
9. Customize Angel Platforms:
Angel Investors like to remain anonymous, but you can find them on some online platforms. These are your best chance to find investors. Hence, we have listed the prominent Angel platforms:
- Angel Capital Association (ACA) — This is the largest network of angel investors in the world. ACA boasts over 1300 members accredited angel investors and over 250 angel groups.
- Gust — It is formerly known as Angelsoft, and it has raised over 1$ billion in funding through its extensive angel network for its startup. A gust startup application is viewed by hundreds of angel investors across the world.
- Carrefour Capital Connexion — This website has a database of various venture capital sources and business projects. You can search their database to find the potential angel investors throughout the world. This website lets you register your business projects for free.
- The BC Angel Forum — This website allows you to deliver “live” presentations to corporate investors and pre-screened private investors. You can get an equity financing of $100,000 to $1 million.
These are some of the ways you can connect with Angel investors online.
10. Fundraising advisors: If none of the above ways worked or you are not confident enough to close a deal. Then you can hire a fundraising advisor who will meet potential investors in your presence and close deal on your behalf. However, there are a lot of fraud advisors in the market. So, you need to be careful before you hire someone and disclose your startup idea to them.
These are the ways to find investors for startup. Not all ways will work for you, you will face rejection. But you need to learn from those rejections and improve yourself and your idea to connect effectively with investors. Soon, you will find the one that will help you take your startup to the next level.