A guide to finding investors for your startup
When starting a new business, there is already so much to think about; from goods or services to branding, marketing and your USP.
On top of that, you have property, staffing and of course, funding to think about. There’s a lot on that business checklist that you need to tick off before your vision can become a reality.
Well, we’re here to try and make things a little easier for you.
In this guide, we’re going to take a look at how and why you need investors for your startup.
To do this, we’ll take you through each stage of the process, teaching you how to find and appeal to potential investors to secure that all-important funding.
Let’s get started.
Conduct a self-assessment and prepare thoroughly
Before you can begin looking for investors, the first thing you need to do is ensure that your business is investment-ready and that you’ve got a clear and comprehensive plan in place.
This will be crucial for putting together a pitch deck, having a strong understanding of the value of your company and ensuring that all legal regulations are being met.
Armed with all this key information, you can proceed to the next stage.
Seek some professional advice
If you’re new to the business landscape, you might be feeling a little unsure about what you need and where to start.
If that’s the case, it might be a good idea to start by consulting with financial advisors or other important industry mentors.
They can provide you with insights, give tips on how to attract investors and point you in the right direction as you’re getting started. They can also be there to support you later in the process to ensure that everything goes smoothly.
Begin to build your network
Professional advisors aside, now it is time to start networking and looking for further valuable information and connections. There are several ways you can begin to build your network and these include:
- Attending industry and networking events, conferences and seminars
- Reaching out to university alumni associations and networks
- Utilising online networks and professional tools like LinkedIn
The more your network grows, the more opportunities will become available to you and you’ll quickly start to feel more confident in your startup.
It’s worth noting that this isn’t a task specific to the early days of your business. You should never stop networking as it will always be an important move professionally. But you certainly should ramp up your efforts when you’re starting out.
Start to explore online funding platforms
Another important step early in your funding journey is to explore the different platforms that are out there that could potentially be a good source of capital. There are serval options to consider such as crowdfunding platforms like Kickstarter, which can be ideal for attracting smaller investors.
Alternatively, equity crowdfunding platforms are a way of offering shares to the public or there are peer-to-peer lending websites for business loans funded by individual investors. These can be a great place to start and one of the simpler ways to find funding.
All you need is your computer or even just your smartphone.
Look for government schemes and grants
The government also offers various schemes and grants to help businesses get started and it’s worth doing some research to see if you’re eligible for any of these.
For example, they offer the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). These have been designed to encourage investments in SMEs by offering tax relief to individual investors.
On top of that, Innovate UK is a public body that aims to provide grants and funding to small businesses focusing on innovative new projects.
Consider other funding options
If you’ve still not found the right funding solution for you, don’t worry there are some other alternatives you can try.
Why not consider angel investors? These are individuals with money who can provide capital in exchange for convertible debt or ownership equity. Venture capitalists are another option and these are firms that manage pooled funds from a number of investors.
You might also wish to engage with startup accelerators and incubators. As well as offering initial funding in exchange for equity, they can offer other important resources like office space or mentorship.
Reach out to find investors
As you can see, there are a lot of great schemes and platforms out there that you can use to help find the right funding. However, if you’ve not raised enough money yet or you’re sadly not eligible for these schemes, you might want to conduct some outreach.
There are two types of outreach.
Cold outreach involves contacting potential investors that you don’t know or have any previous relationship with. In this scenario, you need to make sure that you do your research effectively and craft a compelling pitch.
Warm outreach, on the other hand, involves leveraging your existing network. Through the people you already know, you’ll aim to meet potential investors. There are several ways you can achieve this, either by attending industry events or utilising platforms like LinkedIn and building relationships over time.
No matter whether it’s cold or warm outreach, always be sure to do your research, tailor your messaging and be transparent.
Perfect your pitch
Once you’ve identified potential investors or even if you have a better idea of the route you wish to take, it’s important that you perfect your pitch deck.
We’ve briefly touched on this above and your initial research and assessment is going to come in really handy at this stage. When the time actually comes to start reaching out and stating your case, you need to:
- Personalise every pitch you send, ensuring that you understand the investor’s interests and personalities so you can tailor your pitch accordingly
- Practise your pitch, because not everything will take place online and you will need to attend meetings and confidently pitch your business to potential investors in person
- Always follow up after your pitch, keeping potential investors up to date on your business and progress and expressing your continued interest in their funding
Good luck with your search and if you follow the tips and advice shared above, you are sure to secure your small business adequate funding in no time.