7 Tips For Finding Investors For Your Startup Business

An outside investor can range from friends and family to angels and investor capital firms. Getting funding from these groups is popular amid small businesses where it can be hard to get loans. Therefore, there are lots of companies turning to outside investors for funds. Plenty of them are startups looking for the funds they need to succeed in their chosen fields. This article provides valuable tips for finding and hooking investors in this competitive environment, no matter what industry you are in. 

1. Don't Call It Venture Capital If You Mean Something Else

Many people use the wrong word to describe the funding they want. Venture capital, the most challenging to get, comes from a firm. If you are wondering whether your business is a candidate for a venture capital firm, it probably isn't. Angel investment is slightly easier to get and comes from individuals willing to invest in a possibly fruitful endeavor. Lastly, family and friends' funding is the easiest to get and comes from people you have connections with. 

2. Don't Use Bulk Emails

Reputable venture capital firms, such as Xfund, recommend avoiding email templates. Serious investors will not read your summary, listen to your pitch, or even consider your business plan if it looks like you are reaching out for funds in bulk. This practice dates back to when people thought investors looked at business plans submitted without a proper approach. This tactic was never effective in practice, and it certainly is not now. Instead, tailor your emails to specific investors. 

3. Research the Best Approach

If you want to get capital from family and friends, the best tactic is not to ask them if they will invest. Instead, describe your business and ask if they know anyone who would be interested. It gives them an easy out if they don't want to give your business money. It also allows them to speak up if they think it will succeed. 

Similarly, when it comes to angel investors, you will need to identify your targets and research how to approach them. Look specifically for people who donate money to companies in your industry that are in the same stage of development or your area, if possible.

4. Forget Businesses Preying On Hopeful Entrepreneurs

Any companies sending you unsolicited phone calls and emails promising leads to investors? They will take your money and reassure you that angels are browsing their listings. In reality, most angels have never heard of their listings. Your chances of success through these people are minimal. 

5. Approach A Few Target Investors

To be successful, you are going to need to be patient. Check with your contacts to see if you can get introduced to an angel investor. Also, don't be afraid to look for online form submissions and switchboards. While this should be a last resort, it is a good option if you don't have many contacts. 

6. Have A Good Tag Line

As an entrepreneur, you should have already developed your 60-second elevator pitch for your business. While that's a good start, you need to work this down into one- or two-sentence tag lines. Make it short and intriguing. Compare yourself to other companies to give people a good understanding of what you are going to do. Make your company as clear as possible in as short a summary as possible. 

7. Have A Business Plan Ready Before You Start Pitching

If your pitch is your movie, your business plan is your screenplay. Avoid making your plan too big or formal because it will change, and you never want it to be older than a few weeks when you are trying to get funding. Also, don't believe the myth that investors don't read business plans. While some may reject your company without reading your plan, they always read your plan before investing in your business. Without a thorough examination, no business gets money, and your plan will get looked at. 

Startups often flood investors looking for money. To land a deal, you need to refine your tactics. Choose your investors specifically for your company, then refine your pitch to know how your company stands out. This will help you get the money you need to grow your business.