How to Attract Investors

Some businesses are not a great fit for angel funding or venture capital funding. However, your startup is a good candidate for it so you will need to try a different approach. Read on to learn how to attract an angel investor or a venture capitalist and make your business more appealing.

Try to Sell Via Networking

Networking is the number one tip for new entrepreneurs because it allows you to pitch your startup in an organic way. A great way to meet investors is by getting out and networking with local startups and investing communities.

Networking might seem awkward but if they seem interested in your business, they will keep the conversation going. There can be great results by letting things organically happen.

While there is something of an art to the organic soft sell, when it is done right more investors will likely consider your business.

Show Results

It is worth the effort to get customers or users before you approach an investor rather than seeking funds first and customers second. It is important to do this so that it is easier to get investments on good terms if you have some traction first.

Investors want you to show proof that your business idea is going to work and nothing proves this better than having customers that are paying for your products or services.

Ask for Help

Seek out advice from investors by strategically reaching out to them for advice first. You might be able to build a relationship with them that will result in a great willingness to invest in your business later on. It gives them to the chance to point out flaws in your business and shows that you value what they have to say. Asking for genuine advice can lead to a passionate and engaged investor.

Have Co-Founders

When you approach investors, you are not just selling your product or service but your team as well. Angel investors and venture capitalists look for talented co-founders as opposed to a single founder which is rarer.

Choose the right leadership for your business because having the wrong co-founders can be more hurtful to your business than having no co-founders at all. Take your time with the process and make sure you have the right person working with you. Starting a company alone is very hard. Having business partners give you people to rely on and it can be a huge boost for your company as well as attracting investors.

Pitch a Return on Investment

Investors need to make money on their investment in your company. It is important to highlight what they will gain from investing in your business.

Whether you are pitching an angel, venture capitalist, or a family member, it is important to show that you are going to get them a return. The best way to stand out and get interest is to illustrate how and when you will get them a return.

Find an Investor That is a Partner

Be on the look out for investors that will actually add something tangible to your business instead of just money. You should look for an invertor that will help you make your business stronger to serve you better than someone who just has money to offer and nothing else that will be of value to you and your business.

Ask them how they view your company and their growth goal with your company. You want to find an investor that is proactive instead of just one that provides you the money and does not do much else.

Follow Through

You will probably a lot on your plate once you begin seeking startup investment but if you say you will follow up with someone make sure you follow through. Tell investors where you are currently and what the new capital will enable you to do. Get them to agree that the metrics make sense.

Share User Engagement and Metrics

Your users’ reviews are your best weapon going into a pitch. Keep track of information of your top customers, how long they have been a customer for, and more. This demonstrates your commitment to the growth of your startup.

Avoid Following the Crowd

Make sure your product or services solves a real problem so that you attract an investor. Many entrepreneurs try to reinvent the wheel so try to avoid being that person. Think outside the box and you will attract more investors for your business.

The Bottom Line

Attracting investors does not have to be hard. By following the steps above you will be able to have investors interested in your business in no time.