Tips for startups finding investors – Run through the list

Tips for startups finding investors – Run through the list

Do you have an idea for a startup? And Have you approached an investor before? Run through this checklist before you approach investors.

When you’re starting a new business the main important thing to have is; a solid idea. You must know exactly what you’re going for and how you’re going to get it, if you want to achieve success the right way. For success in any endeavour, strategy and planning matter the most. But it is essential to have the money to make those plans a reality.

Finding Investors can be a daunting task for startups. Here is what you can do to procure funds to fuel your business marvel

1. Inviting your family and friends

If you have the support of your family and friends, that’s quite enough. But, if they can help you out financially as well, that’s just awesome.It’s easy to communicate your ideas to the people you love, but it is also a big responsibility. You must ensure that they understand what your after, and what your strategy is. Most of all, you should be sure of your idea before approaching your close ones for money. After they are with you foir the ride, stay focused and let your mind take the lead, not your emotions.

2. Approaching venture capital Firms

Venture capital firms provide seed money to the promising startups in exchange for equity shares. Researching VC firms to figure which one will suit your startup is ideal. To find these firms, you’ll have to build your business social network. Creating online presence for your idea (Product/service) in social networks can attract needed attention.

Approaching venture capital firms, you should be prepared. Get your credit history straight. VC Firms will look into your credit history to ensure your viability. Prepare a detailed business plan so that you can communicate your vision to them. It’s best if you can test your business model in a smaller context. The findings can be used to prove the effictiveness of your business model.

3. The Angel Investors

Angel Investors are affluent Individuals or group of Individuals who provide financial support to startups in the form of seed money, in exchange for convertible debt or ownership equity. When approaching Angel investors, you should be clear about your business plan. While pitching, you should provide as much insight into your vision as you can, to the investors. Many investors go with their gut instinct rather than business jargon.You have to build a certain level of trust by proving the worth of your idea to them. Test your business prototype on small scale and present the findings to show them the potential your startup holds. It is ideal to find investors who are interested in and want to be a part of the area that you are pursuing.

4. Crowdfunding

Crowdfunding is another way to secure funds for your startup. This can be done through virtual crowdfuding platforms such as seedrs, Indiegogo, Kickstarter, crowdcube etc.. These sites help in raising funds for interested startups, generally in exchange for profit returns or company shares.

To build a succesful crowdfunding campaign, spread awareness across social networks and your business connections. Try smart advertising and grow your business connections. Let people know about what you’re up to by sharing images, videos and news related to your startup. You need to show people why they should contribute to what you’re doing. You need to build public interest. Offer rewards. Make your business present in all social media platforms. Approach related businesses to find interested investors. Crowdfuding is ideal for businesses with creative and interesting ideas for their startup.

5. Take a Loan

If finding investors seems too much of a hassle for you, you can always opt for a business loan. Many private firms, Banks and many other sources like region-specific lenders and micro- alternate lenders; offer businesses loans for starting out. You need to have a clear idea what it is that you need the loan for and how much is needed. There is a period of time before your loan gets passed. Stay informed about the progress and try for an early confirmation. Just in case, keep a plan B.

Investors tend to favour ideas which are popular and address the needs of people on a large scale. Make sure while working on a pitch for the investors, to also keep in touch with the public. Welcome outside involvement. Who knows, you might just end up with another multi-million dollar idea.

Know: how to approach investors for funding

These were the tips on finding investors for your startup idea. Generally, you’re going to face a lot of rejections—but that just makes the first time you hear “Yes!” that much more exciting. Isn’t it?

March 9, 2016


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