That is where things start to become a lot more complicated. Impressing investors is not easy especially with a new startup. Without acquiring funds for your startup, your startup will die a slow death. As an entrepreneur, who has worked so hard, this is not what you want. So, how can budding entrepreneur turn the tables and secure the required funding? If you are looking for the answer to this question, you are at the right place.
In this article, Branex mobile app development UK Share seven tried and tested ways to acquire funds for your startup.
- Know the Investors Inside and Out
Your startup funding acquisition journey begins with a comprehensive research about potential investors. Ask questions like “Have your target investor ever invested in similar business ventures as yours?” or “Does your business model coincide with their business model?” Answering these questions will help you identify and target the right investor and increase your chances of acquiring funds for your startup.
Do your research about their likes and dislikes and it will help you to craft a pitch that they cannot reject. The more you know about a particular investor, the brighter your chances are to secure funds from them. Give the investor what he want to see and you will hear investor say, “Take My Money”
- Think like an Investor
Just like in cyber security, you will have to think like a hacker in order to anticipate their next move. Similarly, if you want to get your startup funded by an investor, you will have to put yourself in investor shoes. Investors are wooed by startup that has a huge growth potential and offer higher return on their investments. Even if your startup don’t have much to show but has these two qualities then, you have a brighter chance of getting a green signal from investors. Shed light on the potential growth and future prospects of your business when pitching to investors.
- Keep Your Pitch Short and Focused
Your business pitch can make or break your chances for getting your startup funded. That is why it is important to learn how to pitch your business in front of investors in the right way. It is an art that you won’t learn overnight. You will make mistakes but it is important to learn from these mistakes and don’t repeat the same mistakes again and again. Here is how you can pitch business ideas to investors.
As a rule of the thumb, highlight your unique selling proposition in your pitch and tell the investor what set you apart from other companies seeking funding. Explain the business model and how it will help them earn higher return on their investments. Keep your pitch as short and focused as possible. If storytelling is your strong suite, you can turn your business pitch into a story. This can make your business pitch stand out and will create a far bigger impact on investors than traditional business pitches.
- Don’t Exaggerate Sales Numbers
Yes, you need to grab investor attention but that does not mean that you should exaggerate your sales numbers to impress them. As a result, they end up promising more they can deliver and ends up putting extra burden on themselves, eventually leading to burnout. This is a one of the biggest mistakes that most new startups make in order to secure funding. Be realistic in your sales forecast and have a detailed plan that covers all bases and outlines how you can help investors earn positive cash flow.
- Find a Strategic Partner
If you succeed in developing a great product that impresses your customers, suppliers and distributors, they could become your investor. Yes, this happens rarely but if you maintain good relations with your business stakeholders, they might show interest in becoming your business partner. You can form a strategic partnership with them and benefit from their strength such as knowledge, expertise and experience in particular domain and accelerate your business growth.
- Make Technology Your Friend
Gone are the days when you have to visit dozens of investors physically to acquire funding for your startup. Today, you can do all this without leaving your room. Thanks to crowd funding platforms like Kickstarter, acquiring funds for your new business is not difficult anymore. All you have to do is to convince them how you can achieve your milestone and you will get the fund. Combine that with digital marketing and social media marketing and you can easily showcase your products and projects that you want people to fund in front a large, global audience. Have a great web and social media presence and increase your chances of getting funded.
- Show, Don’t Tell
Last but certainly not the least is to show your product in action. Create a prototype that help investors visualize what the final product would be like, how it will work and how it could solve some of the biggest problem of your target audience? Yes, this might be a bit costly because you will have spent money on building a prototype but it is highly effective when it comes to convincing investors in funding your business. If cost is an issue for you, you can create a bare bone prototype with basic features only. This help investors in setting the right expectations up front which is great for both investor and business.
How do you attract investors towards your startup and acquire seed money from them? Feel free to share it with us in the comments section below.