Funding is the very critical part of the any start up. One should be very careful while approaching the investor in terms of who, when, where and how to approach. An Investor who has money but does’t have any connection or links in the field of your startup is of no use. Hence, you should always look for the investor who can fund the start-up as well as have connection in that particular field of start-up so that the best possible use of his resource is possible.
In order to determine the correct investor one should do a detailed study/ research about the possible options one can have, in case Plan A doesn’t work out there is Plan B but too many back-up plan shouldn’t be there cause one might not put all effort while trying to convince early investor thinking he/she have other backup option.
Identifying startup’s ideal investor
When investigating a specific investor, speak to advisers and other entrepreneurs who have worked directly with the investor.
You want an investor :
- having an extensive business experience with prior startups and knowledge of the target industry for your venture.
- having other investments that may complement your business.
- Demonstrates a desire to help founders, enhance company’s investment appeal and build the business.
- Have the ability to fill in the gaps in your business plan.
- Who is willing to invest time, skills and money with founders for better growth and development of the venture.
- Is well connected in the investment community (both locally and internationally) with investment partners from the fund’s network that may be attractive co-investors for your financing.
- Have a history of successful business building and exits.