Some entrepreneurs and business owners think that finding potential investors for their companies will be impossible.
But it’s actually not that hard to find investors if you know where to look. Here are seven ways to find an investor for your startup.
1. Industry Friends & Connections
If you’re ready to start pitching investors on your startup, the best place to begin is usually with people close to you. And we aren’t just talking about seed money from a rich uncle (but if you have one, it wouldn’t hurt to ask him either).
Talk to founders of companies like yours who have worked with investors to find recommendations. Lots of investment groups focus on specialized markets and rely on industry connections to find new investment opportunities.
2. Local Entrepreneurial Groups
Connecting with other local entrepreneurs and founders outside of your immediate circle can also be an avenue for growth, and not strictly through funding.
Yes, expanding your network by joining industry groups on social media, attending local events for new businesses, and generally meeting like-minded people can help you meet potential investors. But in addition to that, you’ll be able to get fresh eyes and outsider opinions on obstacles that can make your business better too.
3. Business Schools & Alumni Programs
As long as you’re connecting with your community, take some time to reach out to your local college, university, business school, or entrepreneurial program. Successful schools usually have a robust network of alumni, faculty, and donors. Someone among them might be interested in funding your startup.
Also, if you attended or graduated from one of these institutions, you can use your own alumni program or social network as a shared connection to reach potential investors.
A number of online sources can be useful if you’re trying to find an investor from your startup.
Some business-oriented social media networks, like LinkedIn and Quora, can be an effective place to locate and research potential investors. And if you want to get into investment-specific groups, startup consultant Chris Boucher put together a list of good ones, which includes:
Each platform has different methods for connecting entrepreneurs and businesses with funding and support. Check out those links, as well as other online groups, to find the best fit for your company.
5. Accelerator & Incubation Programs
Startup accelerators and incubation programs work with new companies to provide funding, expertise, and strategies for growth. Many such programs are subsidiaries of larger investment firms, universities, and other large or well-established entities.
Accelerators typically move fast, pushing new companies forward with a template for success. If your startup could benefit from an overall overhaul that goes beyond capital, one of these programs could be a great fit for your business.
6. Angel Investor Networks
Angel investors are individuals or small firms that provide early-stage capital or seed funding for new and expanding businesses. And like other things with feathers, angel investors flock together in networks or groups to expand and diversify their reach.
Angel investors can be a good source for your startup because they’re less beholden to executive boards or stockholders. In other words, it’s their money, and they can give it to you under whatever terms and conditions they see fit.
That said, angel investors also usually expect a higher rate of return than other funding sources. You’ll also want clear contract terms and an agreed-upon exit strategy for when the angels are ready to pull their money out.
They can also be a good indicator of the kind of market traction you can expect for your product or service. If no one wants to donate to your idea, for example, you might need to rethink your approach or marketing angle.
Further, there are numerous crowdfunding platforms available, including some that target specific industries or types of businesses. Companies that generate buzz for a funding campaign can not only raise capital but also connect with investors and other industry stakeholders that can help with long term growth.
Final Thoughts on How to Find an Investor for Your Startup
Choosing to put yourself out there and pursue funding can be a difficult choice to make. And making your business presentable and credible for investors is a lot of work too. If nothing else, hopefully this list will make finding an investor easier to check off your to-do list.