You might have the best business idea of the decade, the work ethic to follow your plans through, and the startup team to make your dream a reality – without startup money, you’re still stuck at square one. To achieve any progress, you need investors, and this guide can help you attract them.
- Know Your Audience
It’s pointless pitching a health food idea to someone whose money and interests are tied up in the candy or beer industry. Make sure you’re targeting your message to those who are already inclined to listen due to common interests, financial, personal, or otherwise.
- Start Local
Small businesses make their bread and butter with local investment. Communities like to feel like they’re invested in small businesses as opposed to corporate monoliths. When looking for your first investors, it often pays to start small and start local, including local banks.
- Angel Investors and Venture Capitalists
These can feel (appropriately enough) like having a financial angel and devil on your shoulder. Angel investors can help small businesses grow, typically have a more personal connection with you, and genuinely want you to succeed. Venture capitalists have a reputation for being cold, calculating, and only caring about turning profits – and that idea of them isn’t wrong. Still, they often have deeper pockets, which can be helpful if you’re expanding fast. That said, given their often more uncaring penchant for raw profit above all, you should be very careful about making any promises to venture capitalists or signing any company control over to them.
- Crowdfunding Campaigns
With websites such as Indiegogo, GoFundMe, and Kickstarter, it’s easier than ever before to get everyday people to invest in your ideas. A crowdfunded campaign can be a great way to avoid venture capitalists and obligations to larger donors. Sourcing donations from dozens, hundreds, or even thousands of smaller donors can also make your venture feel more like a “group project,” thus helping build a sense of “community” among investors right off the bat. That said, with obligations to that many people, you need to be very conscious about releasing regular project updates and keeping your investors feeling “invested” in you and the project.
Each of these options can help new startups get the fuel they need to sustain themselves.