https://nasacademy.com/blog/article/how-to-find-investors
If you’re building a startup, you’re probably going to need to get funding from outside sources to help you get started. This is where investors come in. So, how do you find investors? Where do you start looking?
First, you want to make sure you have a solid understanding of who these people are, what investing means, and what kind of investor you are looking for.
Investors are people who contribute financially to your project or business, with the expectation of making a profit in return. Investors will get a share of your business, which means that, when your business grows, they are able to sell their shares for money. There are different kinds of investors you can approach depending on the types of investments you’re looking to get.
Typically, there are 5 types of investors:
These are the types of investors who fund startups in their early stages. Sometimes, these are businesses or organizations, or just wealthy professionals, commonly known as “DDI” (doctors and dentists with disposable income) who don’t want the risk of starting their own business, but are looking to put their money into something, and be part of a project.
Angel investments usually range anywhere from 50k-500k in funding. When picking these investors, think about not only how much money they are offering, but what other resources and connections they can give you too. Once you get in with an angel investor, they tend to be connected to many others who could help you in the future.
Venture capitalists, or VC’s, are investors who you go to for larger financing. Their average investments can range from 500k to millions of dollars. However, these investors are much harder to land as a startup because they want to see growth within a company. Venture capitalists typically only invest in startups like tech or software industries because they are scalable and tend to grow quite large if they’re successful.
One of the most common ways of sourcing financing, especially for startups, is getting investments from people you know – like friends, family, or friends of friends.
Getting loans from banks is another investment option, but it’s normally only done by more established businesses. You need to have revenue coming in or some kind of collateral to offer up in return. This is why typically startups resort to other investors early on.
Peer-to-peer lending is an option for those who might not qualify for a bank loan, maybe because of a low credit score. This option allows you to apply for a loan from a company or organization instead of a financial institution.
Once you’ve familiarized yourself with the different investment options, now it’s time to reach out to possible investors. But how do you find investors? Here are some simple ways to help you get started:
The best place to start is by asking the people you know.
Ask your friends, family and your family friends. Pulling on your network to find investors is one of the most effective ways to get started. You can do favors for your family members in exchange for their support – or host a party for your friends to raise money. Especially if there are people within your network who have businesses, they may be looking for opportunities to invest in something just like your business.
Asking people you know could not only lead to private investors like this, but the people you ask might know angel investors or VCs looking for businesses like yours to invest in. Once you break in and find your first investor, it often opens up connections to other investors.
Crowdsourcing platforms give you a public place online where your family and friends can donate to your project, but also where other investors can discover you. These platforms are sometimes hit and miss – but can be a good option if you’re just starting out.
There are different kinds of crowdfunding options you can explore, from simple donations, to peer-to-peer lending and more. Some popular platforms are: Indie GoGo, WeFunder, Prosper, and Ondeck.
Consider looking through LinkedIn to find some possible investors – there’s especially a good amount of angel investors on this platform.
But also simply Googling for investors might give you some promising results. If you’re looking for VCs, Google: “VC list” with your city or area and you should get a list of VC options you can reach out to.
A great way to find angel investors is through what’s called “angel groups”. Angel groups are just groups of angel investors that regularly meet up to find startups to invest in. These groups are common since being part of a group is typically less risky when investing in startups, and it also allows them to vary up the ventures they invest in.
You need to be accepted by these groups, so make sure you have a good pitch and you know your industry really well. But once you get in, you will have plenty of access and resources available to you. You get access to their network – which is a crucial part of building a business. To find angel groups, use your network, ask people you know, and try Googling some groups in and around your city.
Startup events are a great way to find investors, and you can also meet other entrepreneurs like yourself. A lot of events will allow you the opportunity to actually pitch to investors as well.
This is also a great opportunity to learn more about the startup space and entrepreneurial world – which is crucial if you’re new to business. Google startup events in your area and make it a point to go to them regularly. The more people see you at events, the more seriously they will take you.
If you’re serious about your startup, it’s worth applying to local accelerator programs. These programs give you the resources and financing to build your idea. But before you commit to one program, make sure to research that particular one and the successes that have come from it. You want to make sure you’re getting into something that’s going to support you in really growing your business.
Accelerators can be a great way to not only receive the funding, but also to get support and networking connections that you might want to leverage in the future. Simply look up local accelerator programs, or ask other business experts or friends if they’ve heard of any good ones you could apply to.
If you want to know how to find investors and launch your business: know how to promote yourself. Make yourself seen. Create a blog, post social media content, get out to events.
Whatever it is you have to do to get people to know about your product or service, and believe in your business enough to invest in it, do it. Tell your story, and make sure you always have a snappy elevator pitch ready.
Preparation really is key – after all, you never know when you might meet a potential investor.
We’ve brought together the top CEOs, founders, and career experts to form a business learning community. Whether you’re looking to pivot your career, pitch your billion-dollar idea to investors, or want to become a digital nomad, you’ll learn all this and so much more in this Nas Academy Business Community designed to guide and support.
This community offers a safe space to network, learn, and collaborate with some of the most innovative thinkers around the world. On top of that, we’ve pooled all our resources to give you access to thousands of dollars worth of Nas Academy classes and resources – all under 1 subscription.
By subscribing to the Nas Academy Business Community, you’ll also be invited to join exclusive events and workshops with renowned guest speakers – an opportunity that you won’t easily find anywhere else. So, if you’re looking for people who share your interests and will support your career journey, subscribe today and see how much your life will change.
Build your own business
By Admin Nas Academy
By Team Nas Academy
WE EMPOWER CREATORS.
