For better or worse, the corporate market has made it impossible for small businesses to spring up without stable funding and resources backing their efforts. Whether you have an original startup idea in mind or plan to build on the foundations of existing products and services, finding reliable investment partners can be challenging. According to Fortunly, 77% of startups rely on personal savings as their starting point, with 41% choosing bank loans and cash credit as their solution.
However, there are numerous other avenues to secure stable funding for your startup both locally and globally depending on your business model plans. With that in mind, let’s take a look at several steps to find investment partners for your startup project in order to launch your small business venture on the right foot.
Research your Target Industry
What makes your product/service different than what is already out there? What benefits will your consumers and investors have by utilizing your product/service as opposed to your competitors`?
The best way to get started with securing investment partners for your startup is to research the industry you will operate in. Find ways to make your idea, brand and business model unique and you will be a step closer to finding the right funding partners.
Define the Elevator Pitch
You will likely find yourself in situations where quick thinking and sales will be necessary to secure reliable funding. After all, investors and financial backers are busy and will certainly appreciate short presentations and sales pitches.
This is where an elevator pitch will come in handy. You can write and format your pitch through a writing platform such as Studicus which will allow you to quickly and easily present your startup idea to any one party. Once they are introduced to your pitch, you can seamlessly connect it with Q&A and showcase how passionate and knowledgeable you are of the startup idea you want to launch.
Create a Prototype
Whether it’s a product or a service, your investors will likely appreciate a tangible prototype or a demonstration at the sales pitch meeting. Consult with your team and come up with a working prototype of whatever product or service you want to secure funding for. Allow your investors to see, touch and use the product in its intended manner in order to build confidence and trust in your project from day one.
Reach out to your Network
Your professional and social network contacts present the first line of defense when it comes to securing future funding. After all, people who know you and your work ethics are more likely to invest resources into a startup idea you are involved in.
Reach out to your contacts, present them with your pitch and ask for any additional networking opportunities they might have in mind. Depending on the scale and ambition of your startup project, this might be all you have to do in order to secure enough resources to move forward with your development.
Create an Industry Short-List
Once your network contacts are exhausted, you can create a short-list of industry representatives and companies to reach out to. Established brands, financial institutions and famous investors which are known for funding projects in your niche should make up the majority of your short-list.
Once the list is created, you should go through it carefully and contact every person/brand on the list for potential financial backing and/or other resources you might need. While not every contact will be willing to work with you, those that do will affect your idea’s success in major ways.
Hook the Investors with Benefits
It’s important to put things into perspective once you start reaching out to investors and financial backers. For them, your startup idea might be interesting on paper, but the bottom line will always consist of tangible benefits and returns.
With that in mind, take time to define what objective advantages will that particular investment partner have from working with you instead of someone else. Hook them with actual and real-world benefits of investing in your idea and you will seal the proverbial deal more easily than otherwise.
Schedule a Follow-Up ASAP
Lastly, your investment partners and backers should be aware of the deadlines and timetable you work under. Thus, any meeting, sales pitch or discussion you might have with a potential financial backer should finish with scheduling a follow-up.
Whether that follow-up is to define further details of your funding needs or to simply get a positive or negative response from the investor, follow-ups will let you know where you stand. Don’t rely on the other party to reach back to you on an undefined date when they may or may not have time to do so – schedule follow-ups right after the pitch and you will have much better chances at securing your resources.
While the notion of securing funds and other resources from third-party investors may seem nigh impossible, it’s important to understand that it’s all about ROI and monetization opportunities down the line. No investor will give out charity for the sake of helping you out without a return.
Define your idea from the perspective of a tangible business model with further development and growth opportunities before approaching investment partners. Once you understand the potential of your startup internally, every investor will be at the very least interested in what you have to say, which is what will create an opportunity for you to close the deal and move forward with your startup.
Author: Nicole D. Garrison
Nicole D. Garrison is a content strategist, writer, and contributor at a number of platforms for marketing specialists such as WoWGrade. She is a dedicated and experienced author who pays particular attention to quality research. In her free time, Nicole is a passionate runner and a curious beekeeper. Moreover, she runs her own blog LiveInspiredMagazine.
Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.