Knowing when it is time to get your startup investor ready can be challenging for startup founders. The truth is, many founders wait to long to get their investment ducks in a row. This can lead to no funding, which is the second top reason why startups fail, behind lack of market.
Some may be too busy tweaking their startup products and services to focus on funding. However, getting investor funding is a key element to the ownership and management of a business just starting out.
You can have the greatest entrepreneurial idea on the planet, but without injection of funding, how will you get it to the masses? To help you get your startup investor ready, we compiled a list of essentials you need to consider and implement.
Who Are Your Startup Investors?
One of the most important first steps to securing an investor is to brainstorm and list who exactly will be ready to invest in your startup. A common misconception is that an investor is an investor without thought to the type of investments they make.
Here are a few key aspects to finding the right investors:
- How much money do you need per investment round?
- Who are the investors that invest in your startup industry/niche?
- What kind of investor do you want (angel, venture capital, institutions)?
- What is your market potential?
- Where can you find the right investors (LinkedIn, angel websites, conferences/events)?
Answering these questions will allow you to hone in on the right investment for your startup at early stages. You can also build a network that will allow your business to grow and be successful long-term.
Have an Organized Outreach Strategy
After you answered all the appropriate “Who?” questions, you can compile a nice robust list of potential investors. Next is the outreach stage, but don’t just pick up the phone or take to the email box just yet. You need to get organized in order to approach outreach strategically.
First, put your potential investors and investment institutions into an excel sheet. Fill in as much information as possible, such as emails, phone numbers, social media accounts, websites, media assets, and more.
Then you can begin your outreach, but be sure to fill in what was discussed, what materials were sent, and appropriate follow-up dates and times. Having a clear and concise strategy is optimal to achieve investments you need to make your startup a success.
Be Pitch Perfect for Investor Meetings
A big issue associated to investment is keeping investor attention. People who have the money to invest in startups get hundreds of pitches per day and you will need to stand out in order to land funding. This means you need to create the perfect pitch.
Since you have narrowed down your list to investors interested in your industry/niche, you need to captivate them. Your pitch needs to be short, catchy, and have a very clear value proposition.
For example, what is the problem your product/service is solving and why anyone should care. There are companies that specialize in investment, business ownership and management like Dexter Coleman-Mitchell that can assist in this.
Be Ready to Learn From Failure
The hardest thing about getting investment is getting investment. This is the hard reality for startup owners, and learning to fail at finding investors will actually help you land the funding you need. Not everyone will be as excited about your startup idea as you, so be prepared for that reality.
The good thing is that you can learn from your failures and make your next investment pitch 100 percent better than your last. Practice makes perfect, and learning from failure is something all successful entrepreneurs have made part of their skillset.
From Richard Branson to Tim Ferriss, the failure is an option, but how you use the repetitive rejection is what defines the success of your business, both short and long-term. Winston Churchill once said, “Success is stumbling from failure to failure with no loss of enthusiasm.”
Are You Ready for Investment Funding?
There is definitely a lot that goes into finding, pitching, and landing an investor for your entrepreneurial idea and startup. Startup founders need to be actively involved in securing funding at all stages of the business growth process.
The above helpful tips and considerations are not the end-all for landing startup money, but they will get you moving in the right direction. First identify who your perfect investors will be, get organized, and strike out with the perfect pitch. Is your startup investor ready?