Getting your startup started is no easy task. It takes a lot of research and development, not to mention an endless amount of time to make an iota of growth. If there is a market for your idea and all the parts are in order, you can harness funding to grow your company.
Where do you start? What’s the best approach?
Here are nine things to remember that will make it a quicker and smoother process for finding investors.
Make some money
It might sound counterintuitive, but in order to land serious investment, you need to make some money first. Prove that your idea is worth investors’ time — build a basic version of your app, get it in front of users, make some money, and then pitch your idea. Most investors, accelerators, and incubators want to see that your startup is actually capable of generating real revenue before cutting you a check.
Develop a proposal for your idea
The fundamental aspect of a great proposal is thorough research. You need to know everything you possibly can. Know your competitors, their market numbers, and their strategies. Utilize this knowledge and tweak it to tailor your startup. Be aware of risks in your business and position them in an honest and educated light. The investors will ask you about the risks extensively in your pitch. They want to know the risks associated with their investment.
Get your idea out there
A lot of founders are hesitant to share their startup idea… but this is a big mistake. Reid Hoffman, co-founder of LinkedIn, says “If you’re not embarrassed by the first version of your product, you’ve launched too late.” Even if you don’t think your app is “perfect,” get it in front of real users, make some money, and gain the traction you need to draw the attention of investors.
Leverage your network
The truth is, you are way more likely to land investments or get accepted by a startup accelerator if you actually know someone. Leverage your network — who do you know that could connect you with the decision-makers? It’s still worth trying to expand your existing network, but most deals are the result of personal connections.
Secure meetings with patient persistence
I am not saying hang around office buildings with your business card, but it is good to be persistent. Once you have developed a few contacts, ask to meet with them and pitch your idea. This may be a quick five-minute walking and talking situation, or a full presentation. Take what you can get, and roll with it. The best opportunities come when you least expect them, so be ready.
Present yourself well
Have a well-designed presentation with flattering and easy-to-understand graphics. Develop cohesive brand identity throughout your word use, materials, speech and presentation. Consistent and branded language is necessary to target ideal demographics.
Fake it until you make it
This doesn’t mean you should lie about your background, but acting the part will get you farther than you think. When the questions begin to fly at you, be prepared. Investors want to know about the leadership structure and see it exhibited. The idea and market are important factors, but investors want big picture, too. Know your numbers and strategies to grow the business when the time comes.
Leave them wanting more
Tell your business’ history as if it was a movie, with engaging highlights and perhaps a lesson learned along the way. Leave the nitty-gritty details out of this. Adjust your pitch accordingly for the time limit, and make sure to leave time for questions.
In simple terms, state the problem and explain how your company solves that problem. Get to the point, and avoid ‘history of’ stories. Know your market and know your exit. Investors want an idea that will make them money.
Pitching requires practice, preparation and balance. It may take several times before you get any bites, but that is okay. Be ready for the questions that the investors will ask.
Do as much research as you can and be genuine in your approach. You will learn what works and what doesn’t as you progress. Give them a tempting taste of your business with its fiscal growth potential, and leave on a good note.