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Are you thinking of starting your own business? Every startup needs money and if you don’t have much savings or you are not coming from a very rich family that can invest in your project, then you will have to look for investors. A lot of young people feel scared about getting help and asking for money but actually, this is not so difficult.

What can be difficult is to come up with a killer idea. Be ready that you will be asked a lot of questions by investors; no one will give you a check for developing a business just because its name sounds cool. You have to sound like a professional to get money. So you have to do a lot of homework and consider finding an investor as a full-time job. You have to work hard to get a reward.

In this article, we are going to talk about 10 possible and effective ways to find investors for your startup. By the end of this article, you must feel certain that your dream of having your own business will come true. We will not only discuss 10 effective ways to find investors but provide you with instructions on how to connect with investors.

10 Ways To Get Your Business Funded

Before you start searching for investors for starting your own business, you need a quality idea. The number of people who are willing to support small businesses is huge, however, they invest in those ideas that seem worthy. It’s very important to have a clear idea that you can share with potential investors. You must have a business plan and an exact sum of money that is required for your startup.

You have to be prepared to present your idea and convince investors to fund it. This is why you should never rush with pushing your idea forward and asking for a sum of money that is not justified. There are many examples of business plans on the Internet that will help you to come up with your own.

Before you enter platforms and networks where other entrepreneurs search for investors, you have to make sure you are well-prepared. These are the things that you will need:

  • A name for your company.
  • Business plan.
  • Bank account for the company.
  • Retail space unless your company will be home-based.
  • The number of employees.

These are just a few things that you need to prepare before contacting an investor. If you have a plan which explains what kind of business you want to have, how many employees for the startup you need, where you are planning to base your company and how much money you are expecting to make for the next 5 years, then you should move to the next step: finding an investor.

10 Best Ways To Find an Investor For Your Startup

So, we have finally moved to the list of 10 ways or let’s say places where you can find investors for starting your company:

1) Angel Investment Network

Angel is the biggest and one of the most popular networks that connect entrepreneurs and investors. This platform is simply amazing since anyone can join it for his/her own benefits. Angel Investment Network is one of the most popular since here you have a chance to find investors with capital and their contact information.

At Angel, you have a great opportunity to find investors for your dream company regardless of the field: software, property, food and beverage, medical, science, technology, products, inventions, education, transportation, retail, fashion, entertainment, etc. Angel Investment Network helps to find investors by location too. Usually, those investors who are registered on Angel Network use funds that have been set aside by an investment firm.

You have a chance to find several investors and communicate with them directly in order to discuss the details of your future project. Some networks that Angel offers have mentor hours when you can come and tell about your business idea, ask professionals questions and get feedback.

2) Small Business Administration

Small Business Administration is the best idea for individuals who don’t want to share their profit. Many programs have been recently developed in order to support entrepreneurs. Such programs aim to stimulate the economy by helping individuals to develop new business.

The Small Business Administration offers small loans with terms. More than $20 billion of capital has been channeled through Small Business Administration. By asking such platforms to help you develop and grow your business, you are not expected to share the profit which is an attractive opportunity for young entrepreneurs.

However, not all businesses can be funded through this program. It’s important to check the SBA website and contact them in order to find out whether your business can be funded.

3) LinkedIn

Did you know that LinkedIn finds investors?

Almost 95% of marketers consider LinkedIn to be one of the best platforms for entrepreneurs-investors relationships. At LinkedIn, it’s important to create a great profile because it will be reviewed by potential investors. This is the first step. The following step is conducting a search. You should type in the keyword and choose the location. Like most search options, at LinkedIn, you will find filters. Find “Company” and type in “Investors”.

Review potential investors and connect with them. As you know, at LinkedIn you may have mutual connections and if you have some with the investors, that’s good news. If not, follow the investors’ pages to find out more about them. To connect, write an email by introducing yourself, explaining why you want to connect, listing mutual benefits from a connection.

You will have to make attempts to convince potential investors why your business is interesting and can be profitable. Some other platforms that you should consider for connections apart from LinkedIn are EFactor, Xing, and Plaxo.

4) Crowdfunding 

The number of crowd targeting platforms is really huge. There are crowdfunding platforms with a target on such areas as business, science, art, and startups. Such platforms allow individuals as well as businesses to get funds online. There are various types of crowdfunding platforms such as:

  • reward-based where the investors ask for rewards in return for investment into a startup
  • donation-based where the invested money is not expected back
  • debt-based where you can get a loan for your startup
  • equity where investors take some ownership in your company by getting shares

So there are 4 ways how crowdfunding platforms work and what kind of relationships you may have with investors on them. Finding an investor through a crowdfunding platform can be more difficult than at Angel Investment Network since crowdfunding platforms have many people who want to start a business but they don’t guarantee profits.

5) Business Capital Broker

A business capital broker is a professional who has the contact list of potential investors who may be interested in your very idea. If you find it difficult to find investors yourself through platforms like Angel Investment Network or a crowdfunding platform, or you simply don’t have time, then you will need a professional who has contacts of investors.

Finding a business capital broker is easy on the Internet, however, don’t forget that you will have to pay for the broker’s services and if you have a limited budget, it’s best to search for investors yourself. Cooperating with a broker means that your business loan application will be sent to different investors (lenders). A broker will do his/her best to bring you back as many offers as possible.

6) Crunchbase

Crunchbase is a popular platform with 55 million professionals who share ideas and look for mutual benefits. This is a great place for entrepreneurs looking for investors since here you can find and access investors through advanced search and get personalized alerts. The platform holds profiles of investors and competitors who you can research in one place.

Search for active investors in your location and find those who match your specific criteria. Entrepreneurs can also discover industry trends through Crunchbase, learn how much they can raise, find the average revenue of their competitors, etc. Crunchbase allows everyone to try the platform for 7 days for free which is a great opportunity to learn how a platform works and how useful it can be for you.

7) Incubators and Accelerators

Who are they? They are also investors, however, they are called so because they offer not only money but space to allow your business to grow, they offer support and speed up the process of your business development. There are many incubators and accelerator programs that will not only fund your business but provide you comfort. With their help, you will be able to work in the office. Usually, such an office is a shared space where other entrepreneurs work.

Working in a shared space provides new contacts and ideas. A place like the National Business Incubation Association offers to find incubators in your area. In return, incubators will want equity percentage. You will need to find an incubator to start your business. Notice that incubators may also provide contacts of investors. However, if you have already developed a business that doesn’t grow, you will have to find an accelerator.

8) Venture Capitalists

Venture Capitalists are willing to invest in startups expecting shares. So you have to be prepared from the very beginning that the money that you earn from your business will have to be shared with Venture Capitalists.

However, this is not bad. Usually, Venture Capitalists have skills and knowledge to help your business to grow and bring more profit. You have a good chance to have a successful company in which Venture Capitalists are interested in it too. They will invest in their own benefit. They will be interested to invest in the business, support it but you will have to give let’s say half of the profit to them.

Most Venture Capitalists are interested in such fields as media, entertainment, software, biotechnology, and information technology services. Such companies as Accel, Benchmark, Index Ventures, and Sequoia Capital have the most Venture Capitalists who you can reach online.

9) Startup Launch Platforms

A platform like startups.com can be very helpful. It provides all the necessary information, research, and assistance for individuals who want to start their own business.

Also, at this platform, you will be able to review the ways to connect with investors. Actually, startups.com is the largest startup community with over 14 million members including entrepreneurs and investors.

Most startup launch platforms provide much information for getting educated on the relationship between entrepreneurs and investors. At startups.com, you will be able to do free courses on business planning, product development and finding funding for your dream project.

10) Strategic Partners

Have you ever thought that your family member or friend can be an investor? Finding a strategic partner for your startup will help you to develop business faster.

A partnership is 85% of success, therefore, you may speed up the process of starting a company and getting a profit by having “another head”. There are obvious benefits: you will get help, your liability will be reduced plus between you two you may have enough money to start a business. There is only one disadvantage: you will have to share the profit.


Conclusion

Finding an investor for your startup is possible but you need to be prepared that you will have to knock on many doors until you find the right investor. You should start with a presentation that will include real numbers. If the number is not big, then you will need one investor only. However, if you need a big sum of money, then you will need to find a few investors.

Of course, it’s more difficult since you will have to convince more people. You will also have to write a business plan which should include your market, competitors, and financial projections for about 5 years. Do it well before finding an investor. You must sound convincing and aim to win.

Many entrepreneurs use savings in order to not fully rely on investors.

Finding an investor to fund your business it’s an option but doesn’t forget that you can be fully responsible for your business and avoid sharing the profit as well as going into debt by asking for help. For some entrepreneurs, family and friends are the best people to ask while for some having business relationships with family is taboo. Luckily, there are many opportunities that you can use.

Hopefully, this article was useful and gave you an insight into starting your business and not delaying your business idea.

Written By
Cheryl Hearts is a writer and journalist from Boston, Massachusetts. Her passion for writing started at an early age and evolved during the high school years. She enjoyed creating her own stories, so she decided to make writing her career. After earning a degree in Journalism, Cheryl started running her own blog CherylHearts.com where she’s covering topics of great interest to society.

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