Data makes it clear: nearly half of startups fail due to a lack of funds, cash flow issues, or the inability to raise new investments. So, if you are wondering whether you should focus on attracting new investors, the answer is a resounding yes!
But while you might be a born salesperson with a stellar elevator pitch, you’ll also need to know how to get to the stage of presenting your startup to the right investors. So, how do you raise interest in your project? And where can you find viable investors for your business?
Here are five proven strategies to try.
Look Around You
If you have just incorporated your startup, you know that it’s now time to seek funding. But even before you can count on customer-founded money and investor financing, you’ll need to find the seed money to fund the earliest stages of your business. And, for this, you won’t have to look much further than around you!
The initial source of funding can come from your family and friends, local business pitching competitions, online platforms, or crowdfunding. Alternatively, you could consider bootstrapping your business.
While building a multinational corporation only using your own money might seem impossible, bootstrapping is likely to be a beneficial stage for all startups – at least until you are ready to scale up! Don’t forget that enterprises like Meta, Apple, and Microsoft all started as bootstrapped projects!
Learn About Different Types of Investors
Finding investors is undeniably challenging – no matter how many investment rounds you’ve navigated so far! However, there is more than one type of investor out there and global venture funding increased by a whopping 131% just in 2021.
While most businesses get started with a small business loan, venture capitalists, angel investors, private equity firms, and peer-to-peer lenders are more prepared than ever to infuse capital into growing businesses.
Pro tip: For alternative funding sources for your large US company, consider targeting EB5 investors. While a number of alien entrepreneurs were held back by the EB5 program’s sunset period in 2021, the increase in minimum investment required, and lengthy i526 and i829 average processing time, the EB5 reforms of 2022 have made this visa more accessible than ever, fuelling an influx of foreign investors.
Build Authentic Relationships
Whether you are at a networking event and you’ve just finished delivering your elevator pitch, or you are about to meet a potential investor, don’t forget about the importance of creating authentic, personal relationships with industry leaders and venture capitalists.
Naturally, basing your proposition on accurate industry data and historical figures is essential to building confidence in your project. But investors will be looking for value affinity and business partners they can trust. Don’t be afraid to ask questions, tell a compelling story, and open up about doubts.
Have The Data At Hand
Given the significant financial and business risk investors face when financing a project, it isn’t surprising that they’ll be looking for recent, accurate, and reliable data about how your company is likely to perform over time.
While historical data does not guarantee the future success of a company, producing evidence such as compatibility with market trends, positive profit and loss sheets, honest ROI forecasts, and comprehensive financial plans can help you prove the viability of your startup. Don’t forget to use industry metrics to offer insights into how you are performing against competitors.
Build a Reputation Based on Results
Whether you are a serial entrepreneur or an industry expert who just started a business, your reputation should be based on past accomplishments and results. Some investors and venture capitalists might be drawn to invest in your project because of the trust they have in your knowledge, skills, and past successes.
Spend time building industry knowledge, honing your skills, and seeking feedback from past employers and partners before meeting with your investors.
Tap Into The Knowledge and Expertise of a Mentor
While your entrepreneurial instincts might have always proved right, nothing should be left to chance when launching a business. If you lack the industry knowledge, connections, and expertise you need to remain competitive over time, consider seeking a mentor rather than an investor.
While this strategy might not give you immediate access to the seed money you need, it can offer invaluable connections and expertise you’ll need throughout your career. And, it isn’t unlikely for a mentor to turn into an angel investor over time!
