HOW TO ATTRACT INVESTORS
1. TRY THE “SOFT SELL” VIA NETWORKING
Networking is usually the number one tip for new entrepreneurs for good reason—networking allows you to pitch your startup in a less formal, more organic fashion.
“If you’ve been building a great business, getting out and networking within the local startup and investing community can be a great way to meet investors.
On the surface, it seems like it could be a little awkward. After all, you’re still selling your business—won’t that put people off? Not necessarily. “If they seem interested in your business, they will keep the conversation going,”
While there is something of an art to the organic soft-sell, when done right it can make investors more likely to consider your business.
2. SHOW RESULTS FIRST
It can be a difficult cycle to break: You need money to get customers, but you need customers to get money.
A catch-22 this may be, but it’s worth making an effort to acquire customers or users before you approach an investor, rather than seeking funds first and customers second. “Make a plan to get your first customer that doesn’t depend on huge outside Investment.
Why is this so important? “Particularly if you are a first-time entrepreneur, it will be much easier to get investments on good terms (particularly from non-institutional investors) if you have some traction first.
Investors want proof that your idea is going to work, and nothing proves this better than having real, paying customers.
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4. FIND AN INVESTOR THAT IS ALSO A PARTNER, NOT JUST A CHECK
An injection of cash into your business is great (and, realistically, it’s what you’re after in the first place), but be on the lookout for investors that can really add something tangible to your business beyond just money. An investor who can help make your business stronger—whether through advice or industry connections and knowledge—will ultimately serve you better than an investor who has money to offer and nothing more.
5. JOIN A STARTUP ACCELERATOR
“For first-time entrepreneurs with no direct VC connections, I recommend applying to reputable startup accelerators that can lend their network and credibility to your STARTUP.
6. FOLLOW THROUGH
You’ll probably have plenty on your plate once you begin seeking startup investment, but if you say that you’ll follow up with a potential investor, follow up.
“Fundraising is usually not a quick process. Engage a potential investor before you actually need the money.
7. AVOID FOLLOWING THE CROWD
To attract the attention of an investor, make sure your product solves a real problem. Too many entrepreneurs simply try to reinvent the wheel, so avoid being one of them.
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