Most of the first time entrepreneurs find it difficult to find investors for startup. If you are one among them who is looking for an investor for your business idea, then, this blog post is for you. In this blog post, I will show you the 13 Different Ways To Find Investors For Startup.
Before knowing the various ways to find investors for startup, I would recommend you to have a fair idea about who can be your prospective investor. The reason is, every investor cannot be your prospective investor. Not every investor will be interested in your business vertical. Meeting such investors will be a waste of time, effort and energy. Look for the following qualities in your potential investor:
- Investor should be interested in your business vertical
- Investor should have a history of funding in similar vertical as yours
- Investor should have enough capital to contribute to your startup’s needs
- Investors should understand founder’s mindset and problems
- Investors should be trustworthy and holds a strong reputation with the investor network
13 Ways To Find Investors For Startup :
- LinkedIn / Quora
- Online Tools Like Crunchbase, CBInsights, Mattermark, VentureDeal
- Premiere Business Schools
- Startup Launch Platforms
- Public Entrepreneur Conferences / Summits / Events
- Angel Groups ( or Angel Networks )
- Crowdfunding platforms
- Accelerators and Incubators
- Industry Friends
- Entrepreneurial Community
- Press Releases
- Online Lending Platforms
These are the different ways to find investors for startup. And now, let us understand each of the ways one by one.
1. LinkedIn / Quora
Create a LinkedIn account. LinkedIn is a professional social media (or networking ) site which is a must for fund-seeking entrepreneurs. The advantage of LinkedIn is that it showcases individuals name, professional and business interests and career portfolio. You can use all these information to filter out the prospective investors for your startup business. You can search LinkedIn for profiles of investors through appropriate keywords like “Venture Capitalist”, “Angel Investors”, “Seed Investor” etc. Before approaching any investors through LinkedIn, I would suggest you keep your LinkedIn profile more professional with all updates related to your startup. Your LinkedIn profile and connections should speak volumes about you when your investors visit your profile. Also, scan all those profiles of your friends who can connect you to their investor friends.
Create a Quora account. Quora is a question and answer platform. Search for questions related to “startup investments”, “looking for investors for my business”, “angel investors”, “venture capitalists” and “funding” through the search box and you can find hundreds of investors and funders replying to those questions. This is another way through which you can connect with your prospective investors. Before approaching investors, make sure, you give them a feeling that you are a regular user of Quora and keep helping fellow entrepreneurs by answering their queries.
These are one of the common ways to find investors for startup in India or some other place.
2. Online Tools
There are plenty of tools both paid and free versions for you to sign up. You can choose a type of subscription based on your need. You can find and connect to most of the venture capitalists through such online tools as CrunchBase.com, MatterMark.com, CBInsights.com, and VentureDeal.com. You can find high-value investor connections through these online portals.
3. Premier Business Schools
Make a list of all business schools in your country or state that offers a recognized entrepreneurial program. They will generally have strong connections and network with investors and successful entrepreneurs from their alumni. Approach them with your genuine interest in finding an investor for your business. Though it might be quite difficult to get in, if executed in a proper way, it can give you fruitful results. Or at the least, they can point you through right directions. This is one another way to find investors for startup.
4. Startup Launch Platforms
Through online startup launch platforms like Startup.co and Gust.com you can connect with prospective investors for your business. These companies help startups by mentoring them, later fund and launch them by connecting with the largest collection of investors throughout the world in a very efficient way.
5. Public Entrepreneur Conferences / Summits / Events
Every city these days arrange entrepreneur conferences and summits where startup entrepreneurs and investors come together to network. Such kinds of events are excellent places to meet potential investors and other entrepreneurs to expand your network. During these events, there would be separate session allocated for startup entrepreneurs to pitch their businesses to investors. If your startup if found too attractive, you end up getting funded. Research on the internet for startup conferences, meetups, summits and events in your city and I am sure you will find loads of them in your city happening every now and then.
6. Angel Groups ( or Angel Networks )
You can find your potential investors right there in an Angel Group. A group or an association of individual angel investors are called Angel Groups. Angle groups have an advantage in that they can invest much bigger investments through pooling and enjoy reduced risk. Some of the Angel Groups include Indian Angel Network, Robin Hood Ventures, and New York Angels among many others. Angel Groups are one of the best ways to directly find investors for startups.
7. Crowdfunding platforms
In Crowdfunding, a group of individuals comes together to pool in a certain amount of fund to finance a venture, a cause, a startup business or some aspect of it. This is mainly done during the initial phase of the project ( technically speaking “Seed Stage” ). There are many crowdfunding platforms such as Indiegogo and Kickstarter that are donation-based crowdfunding platform( not expecting equity or profits from your project) and platforms like CircleUp and Crowdfunder are Equity-Based crowdfunding platforms (that invests for equity in your business).
You should be really careful while choosing a particular platform as each crowdfunding site has its own focus and way of incentivizing investors, so study each one carefully to see which one most closely aligns with startup goals and plans.
8. Accelerators & Incubators
Accelerators are dynamic (practical or real-time) MBA schools for entrepreneurs with a startup idea. In layman’s language, accelerators are coaching or mentorship program for first-time entrepreneurs. Though sometimes, accelerators do help in seed funding (initial investment while starting up), most of the times, they act as a medium or channel that leads to several sources of funding for your startup. By getting admitted to an accelerator program, you will get access to the best minds in the startup space who can help you in your idea refinement, validation, and growth. Other advantages include getting access to seed funding, co-working space and IT facilities, finding potential co-founders and developers who can work on your startup product/service.
Most startup accelerators in the world are usually funded privately as an investment fund that takes a slightly small equity from companies that takes its birth from their mentorship program. Though few accelerators are specific about a particular industry, other work with startups from various verticals. Some of the world’s topmost companies like Quora, Reddit, Dropbox, Airbnb etc. were born from accelerators program.
Some of the world’s best startup accelerators are Y Combinator, 500 Startups, TechStars, Seedcamp, Catalyzer.
9. Industry Friends
If you have good friends who are successful entrepreneurs, you can approach them to introduce you to any prospective investors. Especially, if your entrepreneur friends have given the investor a profitable exit through his/her startup, investors don’t mind investing in a company that they are referring to. I have realized through research that, most of the startup investments happens through known connections. As a referral, your startup has more chances of getting funded. One of the easiest ways to find investor for startup is through referrals.
AngelList is a U.S. website for angel investors, startups, and job-seekers looking to work at startups. It is famously called as the LinkedIn for startups and can be used as a portal to find and research about great startups. Its mission is to democratize the investment process and to help startups with their challenges in fundraising and talent. The website allows startups to raise money from angel investors free of charge. There are many biggest seed venture capitalists, VC firms and angel investors on the list. AngelList is also used as a crowdfunding platform. You can find out more about Angel List on their website Angel.co
11. Entrepreneurial Community
You cannot have all the world’s knowledge with you. You got to learn from others too. For that you got to be part of large community of your interest – Entrepreneur community. There are several entrepreneurial communities (or groups) on Facebook and LinkedIn. Also, Meetup.com is a great platform for connecting with fellow entrepreneurs and advisors. Do not become a member of such groups only for the sake of pitching and finding investors. Most of the time you fail by doing it. My suggestion is to get genuinely involved with them by helping each other and taking advice from others. Trust me in this process you will end up meeting your investors.
12. Press Releases
Press releases, if executed well, can be a great way to attract investors towards you. But, if wrongly executed, it will become the end of your startup. You can approach business news websites, famous business blogs, and online PR agencies to write about your startup. You can write about your startup story, new product/services, growth story etc. that highlights your startup in a positive light. Such activities can draw the attention of your potential investors. Sometimes, they might give you a call or most of the times, your PR publicity becomes easier for you to convince them.
13. Online Lending Platforms
Getting a bank loan has become extremely difficult. To counter such problems, several online lending platforms have emerged. Through such platforms, you can lend and borrow money on a peer-to-peer basis based on certain terms and conditions. Some credible online lending platforms include Prosper, OnDeck, and Lending Club.
Hope you found these “13 Ways To Find Investors For Startup” useful. Please do comment below your opinion.
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