8 Ways to Find Investors for your Startup
8 WAYS TO FIND INVESTORS FOR YOUR STARTUP
Even the greatest products or business ideas , no matter how lean the operation or how big they’ve grown already, will need more capital. Even the best startups have engaged in fundraising rounds. Of course, the chances of someone randomly showing up at your door with capital is exceedingly small, especially if you haven’t already attracted some well-connected investors. The good news is that in our entrepreneur-focused world, it is easier than ever to meet seed-stage investors.
Here are a few of my favourite ways:
- Connect with founders in your city who have been funded. Ask for their advice. Impress them and let them introduce you to their investor. It’s worth remembering that local investors may not identify themselves as investors. They are more likely to identify as entrepreneurs, C-suite executives, bankers, lawyers and so on. Individuals who have used their capital to invest in real estate, companies, and own stakes in local businesses. You may also consider finding a co-founder who will not only invest, but help you grow.
- Accelerator programs have an open invitation for applications from entrepreneurs who are serious about growing their idea. These programs usually include a demo day, this is where you will pitch to a crowd of investors, so be ready to nail it. Not all accelerator programs are alike, do your research to see what type of track record and success stories have been developed.
- Techstars Toronto Accelerator
- Badhouse Ventures – www.badhouse.ca
- SOSV – sosv.com
- Mass Challenge – masschallenge.org
- Successful fundraising is about visibility and getting noticed by the right people. Attending an event is a smart way to achieve this. This can include everything from pitch nights to development and coding marathons to tradeshows. There you can speak with seed investors and ask for their advice after the show. Requests for advice are a great way to showcase your venture. Consider attending these:
- SaaS North
- TechCrunch Disrupt
- South by Southwest
- Finally, don’t forget about more passive events where investors are likely to be, like sporting events, fundraises, film festivals, and even more eccentric events like Burning Man.
- It’s a difficult cycle to break: You need money to get customers, but you need customers to get money. Try kickstarting your project by offering an early discounted buy-in for those early adopters. This will help you raise funds and engage early customers. If you can acquire real customers for your product then you will be under less pressure to see outside money, plus nothing impresses investors as much as sales and users.
- Social media can be a great resource for a lean startup, or a solo entrepreneur looking to test the market and attract investors. It’s one of the most cost-effective ways of reach others. You can take a two-pronged approach, writing your own posts and updates while actively approaching others for collaboration and engaging influencers. Here are some options:
- Product Hunt – Community
- Government based funding has been around for a long time. They often have connections and resources that can get you started in the right direction even if they can’t help you with your specific investment needs. Officials with an interest in supporting the local economy are more likely to connect you with the right people.
- Find out where your ideal seed-stage investors source their funds and start developing relationships before you need the money. Then when it is time, you will be more comfortable asking those LPs for an introduction.
- Apply to present to your local angel group. Angel investors are usually high net worth individual that invests in a new or small business and will provide exchange for equity your venture or business. A good way to approach these types of investors is to ask for feedback for your venture rather than asking for money right up front. They may not always be willing to write you a check after an initial presentation. Don’t forget social in your search for angel investors.
Direct messaging can be a powerful tool to reach out to investors that fit your venture and it might only take one great message to connect. Forbes has a great article on the top 50 angle investors.
Most seed-stage investment deals happen within these realms, so get involved in one, pitch your idea and if you nail it the investors will come to you.