How to find investors for a startup: the must-have materials to prepare
Jun 9, 2020
You have this killer mobile app idea you believe will disrupt your niche. So now what? You might bootstrap for a little while, but eventually, you’ll need help from the outside. That is why aspiring founders should know how to find investors for a startup who will support you during all the product development stages.
A well-equipped and prepared startup founder strives to attract substantial investments to turn an idea into an outstanding product.
In this article, we will equip you with a detailed guide on how and where to find investors for implementing your business idea.
How to find investors for a startup: step-by-step plan
No one goes on a hunt unarmed. The same applies to the tech world. For each investment stage, you need to have the right set of materials to pitch your startup idea to your potential shareholders.
Let’s look closer at what you need to raise funding.
At the discovery or idea stage, you have this vision of how your product can benefit your customers and what value you are going to deliver. But it might remain just a vague concept unless you put it into a document called a business plan.
You should come up with a solid plan where you highlight who your target audience is, what the cost structure of your product is, what USPs it has, when and how you’re going to promote it.
Also, include information about the expected revenue that the product will generate, and indicate the time it’ll take to generate the first profit.
All this information is essential as it gives investors a clear picture of why they should invest in your startup and what to anticipate from your product.
It also proves to your investors that you are not just a tech enthusiast dreaming about worldwide success but a smart entrepreneur with an ambitious goal and idea in mind.
Once you are done with your business plan, you can present it to investors. But make sure you do it in a proper manner. You should prepare an eye-catching and understandable pitch deck, which is a visual representation of your plan.
You may also prepare other documents like leave-behinds that include the key points of your presentation. Thus, investors can quickly look through them to get the gist of your speech and remember it.
These types of pitching materials will come in handy at any stage of investing. With the right pitch deck and leave-behinds, it won’t be hard for you to get investors among your family, friends, and angels.
Minimum Viable Product
A minimum viable product (MVP) is a sure way to find investors for a startup and attract more substantial funding. But it’s more than that.
An MVP is a product with essential features that can help you to acquire your first users and get valuable feedback. This is what you need to validate your initial idea and check whether it can stand the competition.
With the help of an MVP, you’ll understand if your users really need or even want your product. If you see that they are interested in your app or software, you can add other functionality to scale your product and boost customer satisfaction. But if it proves to be lacking some vital features, you will be able to tweak it. Additionally, if there’s something wrong with the very concept of your product, you can pivot the product.
To sum it up, an MVP provides you with a bunch of advantages:
- it helps to attract more investors;
- a good MVP allows you to verify your idea and check whether your target audience likes it;
- you may save funds for the development stage and scale your product when you get feedback;
- you acquire the first users and work with your audience to make your product stand out.
User engagement and metrics
Even when you have a full-fledged product that has proven to be successful and generates revenue, you should not relax and stop at this point. To help your company grow, you should continue attracting funding from investors by providing them with user engagement and metrics information.
What investors are really interested in is whether your company is making money and where it is heading. Thus, you should prepare extra materials to prove that your business is prospering and it has the potential to be scaled further.
Where to find funding for your business
Now that you have all the necessary things like pitch materials, MVP, and other metrics under your belt, you need to know where to find investors.
First and foremost, you can pitch your product idea to your friends and family. Sometimes they become the real backbone of the company. Otherwise, you can start pitching to individual investors called angels.
The best way to pitch is to attend various summits and tech conferences, where you can find investors for a startup and pitch your idea to a broad audience.
One of the most popular events with startups is Web Summit. It doesn’t matter if you are a US-based startup or you come from any other part of the globe, you will find the Web Summit conference a good place to show the world your tech startup. The annual event, which is held in Lisbon, Portugal, offers entrepreneurs an opportunity to pitch their ideas and attract lucrative funding from investors.
Here are a few other tech events for startups that you should not miss:
— Disrupt SF is a TechCrunch conference for young startups held in San Francisco;
— NY Tech Day is a tech event for startups, early adopters, investors, and media;
— SXSW: South by Southwest is a huge conference where startups are given the floor to pitch to investors.
If you’re also wondering how to find investors for a startup without attending any tech gatherings, you can use online listings and platforms to find the right people such as AngelList, Investor Hunt, Republic, GlassDollar, Wefunder, FundersClub, OurCrowd.
Common mistakes startup founders make
If you think that the only obstacle on your way to success is where and how to find an investor, you are not quite right.
Unfortunately, many founders overlook pitching materials altogether. They think that only an oral elevator pitch will do the trick and loom investors into funding their startups.
But this is not how things work nowadays. It is vital to have a visual representation of a business plan that will encourage an angel to invest in your business.
One of the biggest mistakes that many startups make is that they prepare to pitch materials themselves. Instead, they should be seeking guidance and assistance from experienced and reliable tech partners like software development companies or agencies that have worked with multiple startups.
Let’s create an impressive tech presentation for your invention
If you’re one of those entrepreneurs with a great idea in mind, Mentalstack will help you prepare the impressive investment materials to convince even the most demanding investors to fund your idea.
We will build a high-quality minimum viable product to ensure you will go to the market early and show your brilliant idea to the world.