One of the most crucial parts of running a start-up in the formative stages is securing additional funding. Because the setup is in a nascent state, it needs a constant influx of capital and expertise, and while expertise and manpower are easy to come by, nobody wants to part ways with their money, even if it means earning a good profit on it. So, the logical step would be to find an investor, a person that can dump cash in your establishment and help ends smooth out. But how to find investors for start-up?
This is the digital age. People look up liposuction clinics on Google Maps and then rate it on Yelp! Needless to say, everything has gone online and people have zero hesitation in getting online and going for what they want. Your problem of how to find investors for start-up has the same answer: the internet. From crowdfunding platforms to approaching websites of famous incubation centers (the business ones, not the hatcheries), you can get your finance problem sorted out online. So, following are eight ways you can ward off the money blues and find investors for your big project.
How to Find Investors for Start-Up: The Methods
Finding an investor is no big deal nowadays. Unless you’ve got rich parents or belong to a circle of affluent people, you don’t need to go for these options. For the self-made people out there, these are some of the steps you can use to get the requisite funding imperative for your new-born establishment.
Investors from Top-Tier Business Schools
Schools and business universities with alumni, faculty or guest speakers who also happen to populate the upper echelon of the entrepreneurial community and are successful business owners themselves can come in handy while shopping for investors. You can simply ring up the institute with the requisite details (which sector you’re planning to penetrate, what do you have in mind) and ask them to point you to the right person to come aboard and finance your dream venture. Such institutions are glad to help since it increases their own prestige and adds to the portfolio of the investor and the school or university.
Through Industry Insiders
Industry insiders can help you get the inside track of what’s happening and who is in the market for a new project to fund. It could be your friends, mentors or simple people who’ve been in said industry for a long time now and are themselves considered the who’s who of business. These people usually have a lot of information on what is on the rise and what is going down; similarly, these people can help you get to the right person at the right time. Industry insiders will guide you on how to approach the person and how to present your idea in a way that the investor can’t say no.
Using Online Platforms
Online platforms like AngelList and Microventure can be a great help in securing investors and funding for your venture. These sites and platforms can help you approach and get financing quick, but with the internet, there is a requirement of keeping your credibility and your trustworthiness on the good side. The easiest way to get an investor onboard would be sites like AngelList, which can sort out investors by location and even the market segment that they prefer to invest in, thereby making it easier for you to get an investor on your side.
Angel Investors Network
Angel investor networks are member-based networks that tend to service by location. They are often operating from a fund that has been set aside by an investment or hedge firm to source deals for the network. Applications are pre-screened, the angel investors can retain their anonymity and founders can find themselves getting offers from up to a hundred investors for one venture (as opposed to going from investor to investor individually).
One of the most effective and popular means of attracting both capital and investors, crowdfunding has especially seen a boost in its popularity from platforms like Kickstarter, Indiegogo and GoFundMe, whose prevalence in today’s online culture has led to such platform powering and funding hundreds and hundreds of profitable start-ups and even getting start-ups their desired investors to help them out in their time of most financial need. And since most of these platforms operate online and require the least bit of hassle and paperwork, crowdfunding options are blowing up in popularity day by day.
Your Locality’s Business Community
Every locale has its own business or entrepreneurial community that looks for promising individuals and ventures and backs them up. These communities are a good way of securing financing or getting investors onboard with the least amount of presentations or giving bank guarantees. Since the community is of local people who, ideally have known the person starting the business, therefore, it would be an excellent way of getting investment. For an extra, get involved with the other founders around you. Join regional tech and start-up groups on Facebook and LinkedIn, attend events, help out with an organizing committee, and meet as many people as you can. And be a human being, not just a pitching machine – ask for advice, but also give advice when you can; talk about struggles in the life of an entrepreneur, and get to know some of the other founders, investors, and the tech community around you.
Through industry mentors
Every business and every sector has its mentor, a person who’s spent a good part of their life developing and running a business. These people have considerable experience and usually have spare money around for purposes that fall in line with your requirements of investor input. Simply contact them, let them know of your plan, your establishment and your projections. Same as an incubation center, you’ll need to pitch it properly since you’ll be talking to an industry veteran, not some kid with a hedge fund. Only after you’ve ticked all their boxes can you get their financial help and their expertise to help navigate you out of turbulent times.
From an Incubation Centre/ Accelerator Program
The business incubation centers, not the ones where chicks are hatched or some other stuff. These incubation centers can be both private and government-owned but the purpose stays the same: getting start-ups with potential funding and investors and help them get off the ground.
Offered by investment firms, seed funds, universities and other large established entities, accelerator programs are found pretty much all across North America. Some of the top accelerator programs are hugely competitive, like YCombinator and Techstars, but the payoffs are big. Basically weeks-or months-long boot camps for the sole purpose of launching a company with classes and talks by highly regarded entrepreneurs,
Accelerator programs are a great way to meet other founders, get real-world guidance from industry mentors, and smooth out some rough edges. Some accelerators offer a seed investment in return for equity, and they usually culminate in a Demo Day presentation in front of an audience of investors.