.jpeg)
You’ve got this great business idea and are ready to take the next step to make it a reality. But every business needs funding to get off the ground; knowing how to find investors is crucial to transforming your startup dream into reality in cases where your own money isn’t cutting it.
The good news is while the investing landscape is always changing, the fundamentals of connecting with the right investors remain the same. If you do your homework, build the right relationships, and create a compelling pitch deck, you’ve got a solid shot at securing the capital you need to launch your business.
In this guide, we’ll show you how to find investors for your startup or small business by outlining the required steps and valuable tips.
How to Find Investors for Startups in 5 Steps
The path to startup success is long, but with the right mindset and the ability to pivot as needed, you can bring your dreams into reality. The journey begins by finding those who believe in you and your mission enough to invest in your future. By following the tips in this guide, you’ll be well on your way to pitching your way to startup victory.
Here is how to find investors for a business in 5 steps:
- Define your business funding needs.
- Build your investor network.
- Perfect your business pitch.
- Attend startup events and conferences.
- Leverage online platforms to connect with investors.
Step 1. Define your business funding needs.
To find investors for your startup, you first need to determine your business plan and funding needs.
This means defining:
- Your Business Model: Plan a solid business plan by answering these questions: How will your business make money? Who are your customers, and how will you reach them? What problem are you solving?
- Your Funding Requirements: How much money do you need to get your business off the ground? Factor in costs for office space, inventory, marketing, and employee salaries. Come up with a realistic funding amount to get you started.
- Your Financial Projections: Develop 3–5-year financial projections that show your potential for growth and profitability. Investors will want to see your anticipated revenue, expenses, cash flow, balance sheet, and key metrics and ratios. Be prepared to defend your projections. Developing a financial model is crucial here.
- Your Funding Options: The two most common options for startups are equity investment and debt funding. Equity investment means selling shares of ownership in your company to investors, while debt funding involves taking out a loan that you’ll repay with interest. Compare the two options to determine the one that matches your needs and risk profile.
- Your Terms and Conditions: For equity funding, determine how much of your company you’re willing to give up in exchange for capital. Come up with a reasonable valuation for your startup, how much equity you want to give away in the seed round, and how much equity you want to keep as a founder. For debt funding, establish an interest rate, repayment period, and collateral you can put up.
Once you have a solid grasp of your business needs, you should be looking at building your investor network, which leads us to step #2 on how to find small business investors for your startup idea.
Step 2. Build your investor network.
Building an investor network is key to raising capital for your startup. Start connecting with different types of investors early and establish genuine relationships over time.
Consider these 4 tips when building an investor network:
- Attend industry events.
- Tap into your networks.
- Research and reach out.
- Consider accelerators and pitch competitions.
a. Attend industry events.
Networking at conferences, meetups, and pitch events in your industry or location is one of the best ways to connect with potential investors strategically. Have casual conversations, share an elevator pitch about yourself, exchange business cards, and follow up to continue the dialogue. Look for angel investors, venture capitalists, and investors aligned with your company’s mission. (More details on this in step 4).
b. Tap into your networks.
Don’t underestimate the power of your networks. Consider speaking with private investors like family, friends, former colleagues, and mentors about your startup and funding needs; they may invest their personal funds or know someone who will. Join relevant groups on LinkedIn and Facebook and post about your company to spread the word to your wider network.
c. Research and reach out.
Search online for angel investors, venture capital firms, and private equity groups that may be a good fit based on your industry, location, or growth stage. Review their websites to find the best contacts, then reach out via email or LinkedIn to briefly pitch your company and request an introductory call. Be professional and personable — do your homework and speak intelligently about why they’re a great potential partner.
d. Consider accelerators and pitch competitions.
Accelerator programs and pitch competitions from the best startup accelerators are a way to gain valuable exposure, advice, and investment. Do research to find ones that match your company’s profile. If selected to participate, you’ll have the opportunity to pitch in front of potential investors and possibly win cash prizes. These programs can be very competitive, so make sure you stand out.
‍
An important tool you need for effective networking when finding investors for startups is your pitch deck. You’ll need it to present and advertise your company to potential investors. Keep reading to understand how you can create an excellent presentation for your audience.
Step 3. Perfect your business pitch.
A solid pitch deck and presentation can make or break your ability to raise funding.
Here are 5 important tips to help you create an irresistible pitch that can get investors interested in your startup business idea:
- Focus on the problem you’re solving.
- Highlight your solution.
- Introduce your team.
- Share your business model.
- Request investment and explain the use of funds.
a. Focus on the problem you’re solving.
Clearly articulate the problem your business is solving. Explain who has this problem and why your solution is unique. Help investors understand the pain point and how big of an opportunity it represents. To get started with crafting a compelling presentation, download our startup pitch deck template.
b. Highlight your solution.
Show potential business investors how your product or service provides an innovative solution to the problem. Discuss your key features and competitive advantages. Share any traction you’ve gained, like active users, partnerships, or revenue. Help investors visualize what success looks like.
c. Introduce your team.
Investors are also betting on the team, not just the idea. Share details about your background and relevant experience. Discuss your team’s passion for the work, highlighting key hires and advisors. Explain your competitive edge and unfair advantage to help investors understand why your team has what it takes to succeed.
d. Share your business model.
Explain how your company will make money and scale. Discuss your customer acquisition strategy, revenue model, key metrics, and financial projections. Share realistic milestones and a path to profitability. Investors want to see a viable business model that can achieve strong returns.
e. Request investment and explain the use of funds.
Specify how much you’re raising capital and how you’ll use the funds. Discuss how this investment will help you achieve key milestones like hiring key staff, increasing marketing, or shipping a new product. Share your fundraising terms and potential exit strategies. Explain the key risks and uncertainties in your business to set the right expectations.
‍
For more details, check out this guide on creating a compelling pitch deck. Above all, keep practicing your pitch, and don’t get discouraged. It often takes many "no’s" to get to a "yes." But with perseverance, you can find the right investors for your startup.
Your next step on how to find capital investors should be attending events for startup founders.
Step 4. Attend startup events and conferences.
Attending startup events and conferences is one of the best ways to network and find potential investors for your startup. Putting yourself in the right place at the right time increases your chances of connecting with the perfect investor or venture capital firm for your startup.
Here are some valuable tips:
- Look for local meetups and networking events.
- Research relevant conferences and book tickets in advance.
- Prepare your pitch and be ready to deliver.
a. Look for local meetups and networking events.
Find angel investors or search online for meetups, pitch events, and networking mixers in your city that focus on startups, entrepreneurship, and investing. These casual gatherings are ideal for starting conversations, exchanging business cards, and building new connections.
Strike up a dialogue, express your passion for your startup, and listen for opportunities to share your pitch. You never know — you might just meet an angel investor or venture capitalist looking to invest in an exciting new company.
b. Research relevant conferences and book tickets in advance.
Major startup conferences like Collision, Web Summit, and Rise are hotspots for prospective investors scouting the next big thing. Do some research to find conferences that match your industry and business model. Purchase tickets in advance, as these events often sell out.
Walk the exhibition floor, attend keynotes and panel discussions, and network at sponsored parties and meetups. Hand out your business cards, set up coffee meetings, and look for a chance to deliver a short elevator pitch about yourself and your startup. The exposure and connections at these large conferences could lead to investor interest.
c. Prepare your pitch and be ready to deliver.
Whether at a local meetup or a major conference, always be ready to deliver your startup pitch. Keep it to 60 seconds or less, focusing on your mission, product or service, business model, target market, and competitive advantage. Your passion and enthusiasm will shine through, grabbing the attention of potential investors. Even if they’re not able to invest right away, a strong pitch and memorable first impression can lead to future opportunities.
Your last step to finding investors is to exploit online platforms.
Step 5. Leverage online platforms to connect with investors.
These days, many investors rely on top fundraising websites and other online platforms to find promising startups and small businesses to invest in.
So, if you’re looking for where to find investors for your startup, consider exploring:
- Crowdfunding sites
- Pitch competitions
- Online investor matching platforms
- Accelerators and incubators
The key is leveraging a combination of these platforms to maximize your exposure, build traction, and connect with investors who believe in your vision. With hard work and persistence, the right investors will see your startup’s potential.
However, don’t forget the importance of having a great pitch deck. It determines your success with an investor to a great extent, and our pitch deck template is a great starting point.
Frequently Asked Questions
How do I find investors?
To find an investor, explore options like friends and family, equity financing, venture capitalists, angel investors, incubators, accelerator programs, crowdfunding platforms, and traditional small business loans. Each option offers different avenues for securing the financial boost you need to support your startup idea or business venture.
How do I find a silent investor?
To find a silent investor/partner, search for individuals or entities willing to earn investment returns with limited involvement. Connect with potential investors through networking, industry events, and investor groups. Consider approaching professionals in your field who may have connections to those interested in proportionate investment returns without active participation.
What do investors search for?
Investors typically search for information that showcases the current financial situation of a business. They often expect to see reports like profit and loss statements, cash flow statements, and balance sheets, along with projections for the next few years. These documents provide insights into the company’s financial standing and potential growth.
Conclusion
The summary on how to find investors for your startup or small business is to get out there and network, build relationships, pitch your idea, and not be discouraged. But above all, ensure your pitch deck is compelling enough to hook potential investors. A good starting point is a professionally designed startup pitch deck template.
