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Six Ways to Find Investors for Your Startup

Six Ways to Find Investors for Your Startup

Written by: Kriti Anand

One of the main reasons businesses fail is a lack of funding. When launching your own enterprise, it is a necessary task to find investors to back you up. An entrepreneur has to become an investor regardless of their experience or financial situation, but it is not wise to commit all your own money to your business. By bringing in investors to pool in their resources, you share the potential liabilities of your company with them. With their money, investors also bring in experience, sales tactics, negotiation tools and their expertise with them.

Here are six great ways to gather investors for your startup.

  1. When looking for investors, it is never too early to start. Entrepreneurs often make this mistake when launching their business. They wait till they have a prototype in mind and intricate details of their product or service finalized before they decide to start fundraising. It does not happen that money starts flowing in the minute you feel ready for it to. To secure the right funding, you have network in the finance community as you build your business.
  2. It is important to know what kind of investors are appropriate for your business. Decide whether you need to look for an angel investor, a high net-worth individual to carry your company through the difficult early stages, or institutional investors, organizations having the specialized knowledge and resources to influence supply and demand in securities markets, for your startup.
  3. The Mana network, Mumbai Angels. Indian Angel Network, TheHotStart, Startup Funding India, are some of the useful platforms in India that work with new startups and help fund them or find investors for them. The Mana Network has many investors on their platform and they don’t charge startups, so it’s a win-win. Apart from that they have accelerators, agencies, influencers and experts too. TheHotStart is a crowd funding platform that has been gaining popularity in India quite rapidly. Most venture capitalists and angel investors are active on social media sites like LinkedIn or Twitter.
  4. For building up their trust in you, you need to talk to your potential investors. However, that is not as easy as it sounds. To make sure you don’t stumble, prepare in advance. Know what you’re doing, what your brand offers, what do you envision as its future, what inspires you, well in advance. Like you want to find good investors, investors want to find good companies, too. Keep that in mind when reaching out to them.
  5. Investors get pitched by a number of companies on a daily basis. They therefore often favor the companies they have been introduced to by a common contact. When looking for investors, try to approach them through mutual acquaintances whenever possible. The mutual acquaintance should be knowledgeable about the positives of your company and should feel like he or she is doing a favor to both you and the investor by making the intro. To ensure that, meet with the acquaintance and promote your company and its USPs in front of them.
  6. Fundraising is a slow and deliberate process. For every single investor you contact, and there will have to be many, you’ll have to set up a meeting, go to them, follow up afterwards, without fail each time. Keep a record of where you are with which investor. Try and understand the process and what it entails. Gradually, with practice, it will get easier with time and success.

When pitching your company to the investors, you’ll be hearing “no” a lot. Without letting the rejections overwhelm you, you will have to keep trying. Finding good investors for your startup is essential, and it requires perseverance. You need to keep getting up each time you fall, till you finally have your own success story, and investors knocking at your door instead of you at theirs.

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