Starting a new business and don’t know how to attract investors to get the capital funding. Well, don’t worry. We are here to provide you with the top tips to attract investors. No matter what type of business you are starting or how big it is? It is always wise to get some extra funds in your pocket to meet the expected and unexpected expenses.
The market has become very competitive and getting angel funding or Venture Capital funding is much more difficult than ever due to the risk of failure. Therefore, it is time to approach the investors through new and unique methods.
You need to understand the investors are mostly business-friendly and they are also looking for unique business ideas to invest in getting high returns. However, most of the entrepreneurs lack the investors’ benefit to make them interested in your business.
What are the Tips for getting VC or Angel Business Funding?
Here are the top 12 tips to get VC or Angel Funding:
- Start Networking
You need to expand your networks. Start becoming a part of your business community. Attend official lectures and seminars. Before approaching a professional try to soft-sell your idea by discussing it casually as part of your conversation.
We know you are thinking talking about business in public gatherings and asking for funds is a bit unethical. Well, you are wrong here. You only discuss the important part of your life and if the other party is interested in your idea they will indulge in the conversation and might set a date with you for a professional meeting.
- Experience Works Like a Charm
The fact about approaching the investor is they are not just going to invest in your business idea. They are going to invest in you and your partner and employees. It bodes well with the investors when you have a team of skilled and experienced professionals.
It helps them to trust in your goals. If the investor knows that you and your team know what you are doing and are aware of all the challenges in your business and have the plans ready to deal with them. They feel more confident about your chances of getting success.
- Create An Effective Business Plan
Having a detailed and credible business plan is vital to approach the investors. Your business plan includes the vision and goal of your business for the next few years. It is a summary of all your business ideas, strategies, investment, target market, profit ratio, and ROI.
Investors are mostly busy and they don’t have all day to hear about your business plan. An effective and comprehensive business plan provides them all the necessary details. A creative business plan also depicts your intention and seriousness towards your business. Besides getting the clarity on your business idea they can evaluate your intentions as well. It is one of the short and sweet methods to attract investors.
- Keep The Figures Realistic
Evaluate your business sensibly. Effective business plans can go down the hill if you evaluate your startup highly. A professional and credible investor will see through your ruse and can refuse to invest.
Even if you plan and implement everything perfectly, there are still external factors that can disrupt your goals. Thus, provide your investors with realistic figures of ROI and profit margins.
At the same time, make sure you are asking for sufficient money to achieve your goals. Investors don’t like to invest in businesses that can’t even predict their expenses to get the desired results in time.
- Approach Family And Friends First For Small Funding
Instead of looking outside, we would advise you to first explore your inner circle especially if you are not looking for huge investments. Your family, friends, and relatives already know you in both a personal and professional manner.
They are also aware of your business idea which you might have discussed with them at one or another time. They are aware of your potential and hard work. Moreover, it is much easier to approach and convince your family and friends. We would still suggest you act professionally and show your business plan to make them believe in your business idea.
- Ask For Their Suggestions
We understand that asking for money to run your business should have ethical and professional boundaries. That doesn’t mean that you can’t have a casual or personal bond. Investors are keener to invest in the projects they feel more connected to.
Instead of cold calling or sending professional emails to get their attention. Try to seek their advice first. Try to involve them in your future endeavors. Do some research about your potential investor and find out their interests and the type of business they like to invest in.
investors lend money to many projects every day and have great connections and knowledge of the market. When you ask for their advice, they become part of your business and like to see how their ideas pan out. In such cases, they are more likely to provide funding for your business.
- Show The Promising Future
Whatever your approach is to compel and encourage the investors to invest in your business. The only intention and motive behind the investment are getting good returns on their investments.
It is important to show investors that they are going to make money by investing in your business. You have to show a promising future to motivate the investors to provide you the necessary funding. Always highlight the potential ROI at a certain time to attract investors.
- Be Passionate
It is not easy to ask someone to give you the money if you are not passionate and confident enough in your business idea and its prospects. To ask money for startups where you have nothing to show except the future promise is a bit challenging.
Today every other person has a new and great business idea so you need to ask why an investor should give you the money? Well, in startups investors are not just investing in your business they are investing in you. So you have to work harder than you imagine to show your passion and make the investor realize that you will stick with your plan whatsoever.
- Show a Potential Target Market
Your chances of getting a good investor will increase if you could show the investors that you have an interesting target market. Every business relies on its demand if you could show investors that your product and services have a high demand and very low chances of failure. They feel more confident to invest in your projects.
Leverage your achievements, join the social media platform, create urgency, showcase your skills. Conduct an online survey to know about consumer’s desires and expectations about your business. This will give the confidence and trust to your investors to grant you the fundings for your project.
- Use The Online Platforms
There are now online fundraising platforms like AngelList and CircleUp. it is best if you approach both online and offline modes of networking. It is best to get the investment personally but online fundraising platforms provide you plenty of opportunities to get the investors.
Don’t let your location stand between you and your dreams. Many top investors like this method as it is more professional and efficient and comes with an assurance of getting the expected returns on the investments. These fundraising online platforms are based on a metric system so if your business idea has potential you can get plenty of investors to stand your business till you start getting returns.
- Make Your Investor Your Partner
As we told you above, investors have great knowledge and good connections. Instead of just asking for money, treat your investors as your partner. They can contribute more than money to grow your business. Ask for their advice, value their opinions, share your strategies and plans to accomplish your targets.
Choose your investors wisely. They can help you to develop networks and add value to your business idea. Make your investor invest monetarily and emotionally to ensure your success.
- Sell Yourself Before Your Business Idea
Unlike the existing business where investors can just look at your profit and loss statements to make their decisions. Startups are trickier and riskier. Investors don’t feel confident enough about their returns and they don’t want to be stuck with someone who can’t make their eyes shine with promising positive returns.
However, investors are always keen on investing in creative and innovative projects. Therefore you have to sell yourself and your skills before you sell your business idea. Do a thorough market search and prepare a solid business plan. Share your achievements with your investors so they feel confident enough to bet on you and your project.
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