A business idea is incomplete without a solid financial footing. As an entrepreneur, you have to find new avenues to find startup investors for your business. The personal resources namely get exhausted on an easy note. The next step is to find an investor with faith in your business idea and belief in your entrepreneurial skills.
Capital is the basic requirement of any business. Your contact list gets exhausted very soon as the business keeps growing and the capital requirement keeps increasing. This leads to a quest for finding new avenues to raise capital for your business needs.
Here is the list of ‘how to get investors for your startup’ -
- Talk to your family and friends
- Arrange for private investment through angel investment or venture capitalists
- Explore the networking opportunities
- Attend pitch night events
- Participate in incubator events
- Display your business idea to crowd funders to find startup investors
Read Also: Raise Seed Capital for your Startup and Grow
Talk to your family and friends
This method has proven to be the most cost-effective method of raising capital for your business startup. Share your business idea and capital needs with your family and friends and convince them to join you in your quest. You can pitch them for loan or investment, however, loans may be more suitable for you to raise as they may not be comfortable in sharing the ups and downs of the business with you.
Generally, an investment shares your business ownership and you need not repay it in regular installments. This proves helpful for your business health. The investors share your profits and bear with you during the loss. Take care that your family and friends do not feel that you are taking undue advantage of their relationship by forcing them to invest. Do not casually approach them.
Make a smart pitch to find startup investors and display your plan to repay their money through business growth. Demonstrate your business plan and show them your prospects. Give them a brief about the risks of investing in your business.
Arrange for private investment through angel investment or venture capitalists
When you have finished with your friends and relatives, prepare a more rigorous pitch to attract private investors. You have to attempt to persuade them to believe in an untested business startup model. Be ready with your business plan and clear goals to get a solution to your question of ‘how to get investors for your startup’. An online presence will be a plus to convince the investors. You can approach the private investors through the following methods-
Angel investors put their money and other resources at your disposal and make your business idea reach new heights. Angel investors can end your quest to find startup investors. Convincing an angel investor is a big achievement as your need for any other source of investment ends here, but you have to convince them that your business plan will make a profit.
These investors provide you with the required capital at the initial phase of your startup in return for ownership of your business idea. Amazon and Apple both were once a startup backed by angel investors.
These investors participate in your business development and you get a solution to your quest of ‘how to get investors for your startup’
These investors come into play when your business starts expanding. They do not use their own money but you get capital from their fund setup. The venture capitalist can prove helpful in your initial stage of a startup but it is more compliant with the already set-up businesses with solid management.
You can approach these investors if you require a huge capital amount that is out of the capacity of an angel investor. The venture capitalist helps you run the show with their technical and managerial expertise. They are readily available with investment if you show them a high return on their investment.
You can find startup investors in your community through networking. It helps you find investors to accomplish your investment goals. For instance, visiting any business workshop may not give you any investors but you come across various other opportunities to connect with them. You can introduce your business idea to the right person to get a solution to your question of ‘how to get investors for your startup’.
A few examples of such networking opportunities are-
- Industry associations
- Co-working spaces
- Toast Master
- Chambers of Commerce
- Affiliation Groups
You can contact them through online directories or social media platforms. Keep a vigil look on your competitor’s websites to update your skills of finding the right investors.
Pitch Night Events
You gain visibility through the events. You can present your idea to any potential investor present in the events. Make sure that you have learned your script well and you are ready with all the answers to any cross-question that comes your way. You have to make the best pitch to a maximum number of people to find startup investors before you land into your right investor.
Startups require the best tool to be successful in their quest of ‘how to get investors for your startup’. They play a major role in their journey as they are run by non-profits, civic groups, or any other business owner. These incubator events help the startups resolve their funding problems.
You can apply for their screening and get healthy business advice in the process
As the name suggests, crowdfunding is getting capital from multiple sources to finance your business venture. You gain their attention through social media and other crowdfunding websites that bring the investors and the entrepreneurs on the same platform. This increases the business potential of the startup and helps them scale greater heights.
Have a look at different methods of crowdfunding-
You ask for investment in return for some kind of reward from your business enterprise. you pitch the investors for a small investment and give rewards instead of the investment pledged by the investors for example- if you plan to run a D2C startup, you can pledge premium membership at the time of initial investment to find startup investors.
Read Also: Pre Post Funding Compliance For Startups
These investments are in the form of donations that are not repaid in any form. You can go for this method to generate small funds for your startup.
You can apply for the investment through online platforms where your profile is displayed based on your business potential and credibility to get a solution to your question of ‘ how to get investors for your startup’. The investors lend you money on the condition of monthly repayment with interest. These investors do not take ownership of your start-up.
This method of investment allows the investors to take some ownership of the company in the form of shares. They do not get investment repaid, on the contrary, they take a share of your profits.
Through these methods, you can find startup investors. Opt for the most suitable method to complete your journey of becoming a successful entrepreneur.
Read Also: Startup India Seed Fund Scheme SISFS
What do investors look for
The investors have a thorough look into your business idea. They look for-
- Your product or service (how it is unique)
- Prospects of your product or service
- Your business plan
- Your team of experts
- Current scenario of your account books
- Future projections
You can attract investors if you have a good business idea. The market projection of your product or service should be high enough to reduce the risk factor in the investment and you get the best solution to your quest of ‘how to get investors for your startup”.