6 Top Tips For How Startups Can Attract Investors

Getting started on your very own startup is exhilarating. It's exciting, and it feels like you're on top of the world. However, when you get into it, there are factors that you might not have considered. How to attract investors may be one of those that you overlook when you start out. 

Attracting investors to your startup can be the right path to transforming your startup from zero to hero. However, most investors don't just jump into any startup and invest in it. There are many risks involved, so startups must make the idea appealing enough to investors. It's not easy, but your startup is one investment away from success with the right strategy. Here are 6 tips and techniques to attract investors:

Solve a problem

It will be easier for your business in general to solve a problem that people are experiencing. Many companies claim to be helping overcome a real problem when in fact they're just solving a made-up problem to sell their products or services. 

If your startup can solve a real problem, investors will see real value in the business. When you try to solve a real problem, you stop yourself from going down the path most businesses take. You don't want to just follow what others are doing and hope that people choose you because of how great your marketing or advertising is. When you try to solve a real problem, you create your own path. 

Build something that will make people's lives even the smallest bit better, and you'll find that you may not even have to look for the right investor - they might find their way to you. 

Befriend them

When we think of investors, it sounds purely professional and transactional. It's a business, after all. It's great if you can find someone willing to put in some capital for your business. However, it shouldn't end there. 

In finding an investor, look for someone who can add more value to your business. Befriend your potential investors because you should see them as something more than a source of funding for your startup. An investor who can help your business become robust in other ways than money will serve you better. 

By befriending your investors, we don't mean that you should be the closest friends ever. You have to treat them as more than just a source of cash. You can have a better, more productive, and mutually beneficial relationship if you do this. 

Make your business appealing 

Investors will not invest in something that they know won't benefit them. This means that you need to show investors your business's value. Before you pitch your business to investors, you must first make sure that it's in good shape. You should be able to show solid results to your potential investors. 

It might seem like a Catch-22 situation because you need investment to make your business grow and gain customers. Still, you will first need at least some satisfied customers before attempting to persuade potential investors to get involved. It's hard, but not impossible. Plan on acquiring your first few customers and make sure they're happy and would want to transact with you in the future. 

Making your business appealing also means giving your brand a push. Before you seek investors, make sure that your brand is strong, both online and offline, because investors will conduct due diligence on your business before signing any contracts. A strong brand will give you plus points.

Investors just want proof that their investment will go somewhere and not to waste, so give them evidence and exceed their expectations.

Show investors how they will benefit

Your pitch to your investors needs to be detailed, but it shouldn't be an information overload for them. When pitching, give them a solid plan of how you can help them. We think of investors as those who can help us in our startups. We need their investments to move our business forward and make it grow. However, if you can clearly define to your investors how their investments can help them, too, they'll be more inclined to work with you.

Make the process easy for them. Show them that they will benefit from the transaction because your business is unique. Your relationship should be mutually beneficial. 

View your business from their point of view

Before pitching to your investors, look at things from their perspective. Think of what they will want to know. Consider what objections they may have about your business. Step into their shoes.

If you can see things from their perspective, you can list their possible concerns. You will be more confident in front of your investor if you know you can answer their questions. Investors will always have a reason why they don't want to invest in a specific startup. If you can figure out these reasons and present the answers or solutions, they will be impressed because you took the time and effort to be ready and confident.

Think outside the box

Investors aren't only people in suits that are all business, business, business. Sometimes, you have to think outside of the box. There are many forms of funding available for startups other than traditional investors. 

One option you have is your family and friends. Getting investment from the people who know you best can make sense because they already have an idea of how they can best work with you. It's still an investment, but it's less formal, and you will have more control over what happens with your business.

There are also online platforms that match you with investors interested in helping your business grow. Remember that you're not limited to traditional investors. If you need funds for your startup, try turning to alternative methods such as crowdfunding. 

Author:

@Rica Singh

Date:

12-22-2021

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