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how to get investors for a startup business

How to Get Investors for a Startup Business

As explained by Entrepreneur, funding is one of the biggest challenges faced by entrepreneurs looking to start their own business. While established businesses already the capital, credit and trustworthiness to secure funding, new business owners do not. As such, they often struggle to win over the hearts of investors. Thankfully, though, there are steps you can take to increase your chances of securing equity capital from investors. Let’s look at how to get investors for a startup business.

How to Get Investors for a Startup Business

Consider Angel Investors

Rather than pitching your idea to just any investment firm, focus on angel investors. Also known as informal investors or angel funders, they are more likely to take high-risk opportunities, including investing in new businesses.

Angel investors work in a similar manner as venture capitalists. Both provide funding in exchange for equity and/or convertible debt. However, angel investors are more willing to fund high-risk businesses if they believe the business will succeed. Furthermore, angel investors work closely with the business owner to assist in their operations.

Prepare Your Pitch

Of course, you’ll need to prepare a pitch for your business. When you initially meet with investors, you want to convince them that your idea is profitable and worth investing in; otherwise, they’ll funnel their capital into other, more lucrative opportunities.

This Forbes article offers some helpful advice on how to prepare your pitch, such as researching each individual investor; negotiating a term sheet offer; and creating a presentation. Assuming you’re pitching to investors, though, the single most important thing you can do is pitch yourself. After all, angel investors invest in the entrepreneur, not necessarily the business.

Tips on Winning Over Investors

Try not to panic if the first investor with whom you meet rejects your offer. Pitching to investors is a numbers game. While you may get some rejections, you may also get some approvals. In the meantime, consider the following tips to win over investors:

  • Create a detailed profile about yourself on LinkedIn.
  • Explain the “scalability” of your business (investors want businesses that can grow over time).
  • Include facts, data and statistics to reinforce the profitability of your business.
  • Keep your pitch short and sweet, focusing on the fundamental points of your business.
  • Hand out business cards with your contact information to investors.

 

This article was brought to you by Intrepid Private Capital Group – A Global Financial Services Company. For more information on startup and business funding, please visit our website.

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Intrepid Private Capital Group • October 4, 2017


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