Startups are mushrooming at a faster pace than ever. As technology becomes easier to use, markets only become more competitive. In such an environment, getting enough funding for a startup can be extremely difficult. Startups in general struggle to get funding most of the time. However, a few adjustments may be able to help you. Here are a number of useful and simple tips for attracting investors.
Have an Excellent Business Plan
Nothing is more important than a business plan when it comes to attracting investors. It has to be well written, clearly organized and well researched if the startup wants to grab the attention of a prominent funder like Fisher Investments’ President Damian Ornan. Big-name investors want detailed and professional-looking business plans. Therefore, it won’t hurt to spend some money to have an expert look over your business plan.
Investors largely work by networking. They are highly likely to look up a startup or a new company if it comes recommended by a colleague or a peer. Therefore, if you want to raise your funding potential, go to events where investors gather, and start networking.
Present Papers at Conferences
Investors like to keep an eye on promising researchers and new business ideas by going to industry-related conferences. If your startup wants to make an impression, present an interesting paper at one of these conferences. Do not present a sales presentation for your company. Keep the topic as something related to the industry, but one that is also relevant to your business.
Keep the Valuation Realistic
Do not over-value your company. Investors hate that. Therefore, keep all the numbers you present realistic. Don’t bloat the value of your company or initial revenue projections. Don’t pitch your startups as the next Google either. Investors don’t want to hear marketing jargon. That’s for the consumers. They want to know the cold hard numbers and the realistic expectations for the company.
Investors, especially those angel investors, don’t just invest in a business idea. They also want to invest in the person running it. Therefore, it’s not just the business that should be pitched to an investor; the founder, or co-founders, should be as well. Startup owners should promote themselves to investors, and convince investors that they are highly capable of running the enterprise. Investors seek confidence in entrepreneurs. They want to see that the person they are giving money to can actually use it to turn a profit.
Assemble an Ace Team
Investors also carefully scrutinize everyone else invested in your startup, and especially those sitting on the board. Make sure you only have the best of the best handling managerial work for your startup. The same goes for the board. One weak link could cost you millions in investments.
Be Ready to be Grilled
Investors will grill you not only about your startup, but also regarding the industry. Therefore, you should know the industry like the back of your hand. Know who will be competing with you, and the challenges ahead. Investors will quiz you regarding these things.
Follow the tips above to improve your chances for attracting an angel investor.