Getting investment for your startup can be a daunting task. Do you need to find investment to scale your business? Well, there are ways to get the investment you need to take your startup to the next level. As the business founder, financing your startup does not have to come entirely from your pocket. You do not have to be face restrictions in getting your business idea off the ground because of finances.
Irrespective of what the business idea of your startup is about, finance is a necessity to take it to the next level. Having the right amount of working finance to take your startup to the next level is vital to realizing the full potential of your startup idea.
This article describes how to get investment for your startup with practical steps on how to approach these investments. From the options in this article, you can decide which one of the options fits your approach and your startup
Ways to Find Investors for Your Startup
Below are some great recommendations on how to find the investment your startup needs to scale up to its potential
1. Private Investments
Through the investment in your startup, investors require some shares as a form of ownership of your company. In general, there are two categories of private investors. These are Venture Capitalists and Angel Investors. Investors are always ready to provide the financial backing to scale startups in exchange for part of the company’s private shares.
Angel Investors are individual investors with the financial backing to support a startup financially. Angel Investment is a way of collecting and crowdfunding startups. In this case, a group of high-worth individuals might decide to fund a startup project while requiring a high return on their investment.
Angel investors are usually there at the very beginning of the company to invest and own a share of the company. Interestingly, Angel investors have a say in the development of the startup.
On the other hand, Venture Capitalists is another type of angel investment. This investment option caters to high-risk high-return ventures. Venture capitalists can take these risks because they do not use their money but that of a pool of investors. Venture capitalists are not, in most cases, interested in the business itself but return for their capital.
In either private investment case, startups can select which private investment type is suitable for the startup.
Recent events show that funding is possible from public fundraising platforms. These groups of individual investors band together to co-fund startup ventures and deploy their capital to its projects. In most cases, public fundraising works using peer-to-peer websites that provide loans to crowdfunding and equity-based businesses.
From various virtual fundraising platforms, startup founders can access a channel of individual investors and other funds to deploy and scale their businesses. There are different types of crowdfunding platforms available to access funds.
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Reward-Based Crowdfunding gives investors some reward type for a relatively small amount of financial commitment from each investor. Kickstarter and Indiegogo are great examples of Reward-based crowdfunding platforms. Donation-Based crowdfunding involves contributing in small amounts with no expectation of future returns. GoFundMe is a great example of a Donation-based crowdfunding platform.
Other forms of crowdfunding include peer-to-peer lending, equity crowdfunding, and others.
3. Fundraising Events
Business revolves around who knows that your services or product exists and your business reach. Business visibility is an important ingredient in getting the right investors to invest in your startup. One of the ways to get investors to notice your business is by attending fundraising events.
By attending these events, you can meet up with different well-connected people ahead of schedule and network through the investors present. Fundraising events could be pitch nights for meeting active investors, hackathons, and coding marathons.
4. Cold Mailing Investors
Sending a concise pitch deck to a notable Angel Investor is a channel that is useful for getting investments for startups. Utilizing this direct mailing method proves useful to get across to the investors you wish to visualize your startup to for investment.
In addition, social media channels can provide the best channel to get through to investors as a startup founder. Social media does not only provides the visibility you need, it also makes it easy to make your startup visible to investors. Taking a more active approach to participate in online activities through leveraging post sponsoring or social media influencers creates the visibility you want.
Directly messaging the investors you prefer over social media can also prove to be useful for raising funds. Through social media channels like LinkedIn, Twitter, and Facebook, startup founders can reach out to VCs and angel investors for a possible meet-up for further discussions.
4. Cold Mailing Investors
Accelerators exist mainly to boost startups to reach their real-world potentials. Applying to popular startup accelerator programs provides the avenue not only for visibility for your startup, but you also stand a chance at getting a modest check to continue working on your idea. Furthermore, the different startup accelerators have connections to top investors and can do the introductions for future fundraising rounds.
For typical startup accelerator programs, there is a demo day where startup representatives have the opportunity to pitch to a sea of investors. Worthy of your notice is the terms and condition associated with these accelerator programs. It is very important that you read and understand the terms and determine if the accelerator program is for you and your startup.
Summing It Up
Getting funding for your startup is an important part of scaling up your business operation. The recommendations above are some of the ways you could get the financial boost you need to take your startup to the next level. While working on whom you want as an investor and the type of investment strategy you are comfortable with for your startup, your pitch deck needs to be up-to-date and flawless.
You should create a clear and easy-to-understand business plan detailing your startup operations. Your pitch deck is a fantastic opportunity to show your investors that you are capable of handling your startup and guarantee their returns.