Starting a business is an exciting endeavor, whether it’s your first time or you’re a serial entrepreneur on your 5th venture. Finding investors and acquiring capital for your startup can be challenging, even for the experienced, but it’s something all new businesses have to do. You’ll need money to acquire your business property and the licenses you may require to operate it. And you need money to pay the first batch of employees before the profits start rolling in to take over. How many of those factors can you pay out of your own pocket?
In today’s highly competitive environment, an innovative idea is seldom enough to attract investors. Your business pitch, corporate documents, and investor proposals need to be done correctly and professionally in order for investors to see your startup as a serious investment. You’ll need to be able to tell investors what you need the money for and when they can expect to see money come back into their pockets. So before you begin seeking investors, you need to have your pitch polished and your corporate structure correctly established because without these you will struggle to attract serious investors. Here you can find out more about what your options are in terms of corporate structure and investment documents.
Moreover, try keeping your business secure with cybersecurity measures. Startups are usually highly vulnerable when the business is growing, and it might be beneficial to present a secured business front while looking for investors.
How to Find Investors for a Startup
When you are strategizing about the type of investors for your business, you can consider the following criteria:
- Someone in the same industry or is looking to expand into the industry;
- Someone who wants to buy startup shares;
- Someone who can double as your mentor; or
- Someone who can simply provide the appropriate funding.
These attributes will help to strengthen your business and make it more attractive to other investors. You want to find early investors who have goals aligned with your business, thereby creating a partnership based on shared interests. Such investors could be found through social networking platforms that provide business-oriented aids like LinkedIn.
Once you’ve narrowed down your list, the next step is visiting the right places to meet potential investors.
Below are some potential resources for new entrepreneurs looking to prepare their business pitch and to meet investors.
Business Schools
Business schools have entrepreneurial programs that have a network of business owners and investors. They can help you craft a pitch that will help you raise funds. Alternatively, some business schools host pitch competitions that attract local investors and some of them might be interested in investing in your startup.
Accelerator Programs
These are fixed-term, cohort-based growth programs that act as boot camps for entrepreneurs. They provide mentorship on market-readiness and investment development to help entrepreneurs develop a fundraising strategy and optimize their business model for the market.
Crowdfunding
Popularized by the digital landscape, this practice uses multiple, small donations from individuals who are interested in your product or the business as a whole. Crowdfunding also doubles as a marketing tool since you can generate buzz as you wait for investors to take notice.
Government Programs
Several government programs provide financial assistance to startups. They are often divided into two types of programs. In the first type of program, the government agency itself invests in your business. In the second, the government arranges meetings with potential investors.
Industry Friends
Fundraising for a startup goes more smoothly when you approach individuals or organizations from the same or complementary industry. Approach your industry friends and ask them if they can introduce you to the heads of their company or other experts.
Work with the Professionals
Starting a business takes up a significant amount of time. Finding investors and fundraising divert your attention from day to day operations. Working with a legal team that has experience with startups and fundraising gives you the advantage of task delegation.
The Apex Law Group provides entrepreneurs with legal assistance to make sure their businesses are correctly established and prepared to attract investors. We also offer flat rate formations that help you build the foundation for your startup.
Learn more about our services when you book an appointment. Call us at (206) 448-7000 or send an email to contactapex@apexlg.com for details.