Congratulations! You have decided to become an entrepreneur and are ready to launch your startup.
The feeling of straightaway becoming the boss, sitting in your own beautiful cabin, running the company with absolute power is—heavenly.
But, do you know, startups generally begin with high costs and limited revenues, and this is why you have to find investors for investment from various sources.
Oops! You didn’t think about this.
Don’t worry, you are at the right place. We are here to help you out.
In this article, you will know about 7 ways to find investors for your startup.
Who is Investor?
An investor is an individual, company, NGO or any group that invests capital with the aim of making a profit. The investor’s main concern is to maximize return while minimizing risk.
There are many types of investments, like: equity, debt securities, real estate, infrastructure, currency, commodity, token, derivatives such as put and call options, futures, forwards, etc.
So, find investors who are in sync with the nature of your startup’s profile, else, you might end-up with the wrong investor resulting in the loss of money, time, labor etc.
Where to Find Investors
If you have come this far reading, then it can easily be assumed that:
- You have an amazing idea, but lack the funds to materialize it, or
- You have already launched your startup with little investment, and now need more funds to grow to higher level, or
- You have multiple projects, and thus you need more funds
In any of the above case, you will need investor to make your dream materialize.
So, to materialize your dream, let’s find Investors.
1. Angel Investors
The name ‘Angel’ is self-explanatory. Angels are those divine entities who come as a savior when someone is in desperate need of help.
Angel investors are individuals with a high net worth and have the ability to provide startups with a significant amount of capital. They willingly invest their money in small-scale startups and businesses. Such individuals are professionals from various walks of life and have helped many young entrepreneurs to live their dream.
Angel investors are highly beneficial for startups who need access to funding in the early stages of growth. In return, they seek minimal stakes in the shares of the company. It is important to ensure that your idea is thoroughly researched and validated to motivate the angel investor to invest in your startup.
Some of the Angel Investors in India for startups are:
Furthermore, you can use slidebean to find the investors.
2. Family and Friends
Well, what can be more relaxing than getting funds from your own family and friends.
Finding an angel investor or any outsider is a daunting task. However, a friend or family member isn’t a hard sell because they already believe in you and are passionate about helping you succeed.
You must remind yourself to keep your personal and professional relationships as separate as possible, if you are planning to use this funding avenue. You can do this by getting everything in writing and clearly explaining the risk involved in investing in a startup and make sure they understand they could lose their investment.
3. Bootstrapping Your Business
Bootstrapping is a form of self-funding your startup. If you choose to bootstrap your business, then bear in mind that you have to rely on your savings and initial revenues. This funding model is devoid of external interference from investors. Studies indicate that out of the pool of new startups, more than 80% are funded by the founders’ personal investment.
When compared with external investors, bootstrapping can prove more beneficial as it allows the entrepreneur to exercise control over critical business decisions as they have no pressure from investors to release their product.
However, the downside is that this form of financing might also place the entrepreneur under unnecessary financial risk. Additionally, it might not provide the startup with enough investment for it become successful at a faster pace.
As a young entrepreneur—who has just launched the startup—might sought after crowdfunding. It involves taking up funds from a number of people who show interest in your products or services. Bear in mind that in crowdfunding, the investors are not professional investors but common people willing to invest their capital in startups.
To avail crowdfunding, you need to upload a detailed description of your business mentioning investment amount required, goals, and business plans for the future.
If the investors find your idea expedient enough, they will be more than willing to make the investment.
5. Social Media
Talking about attracting people, then how can social media be left behind. After all, this is a most sought after digital platform; especially, for the youngsters. It can be your best means as a lean startup or solo entrepreneur looking to test the market, gain traction, and attract investors. It makes it easy to be discovered, and is still one of the most cost effective methods of reaching others.
If you can get the social profiles of the investors, then you can send them the direct message briefing about your business idea. A powerfully written persuading message can provide you the capital your startup needs.
You have seen lots of blogs, but never thought of it as a means of fund raising!
You are right, blogging is one of the most underrated methods of attracting attention of potential investors.
Finding it difficult? Instead, search the blogs of the investors! Most of the bloggers leave the comment section open. Thus, leave a thoughtful comment to get noticed and start building the relationship from there.
Your email should only explain about your idea, nothing out of the context. It should be strong enough to draw the attention of the investor and convincing enough for him/her to invest in your idea.
Emails should not contain unnecessary information like, your long drawn battle of life. Keep it crisp and concise. Emails have been responsible for the launch of some very important and notable startups. So don’t underestimate its convincing powers.