It’s not easy to get funding for a startup, which is why over 77% of small businesses are funded by the owner’s personal savings. Yet if you are lucky enough to secure venture capital, your chances of success will be quite good. The value of overall venture capital investment in the US is nearly $72 billion, but startups get a very small fraction of it.
To get more money from your investors you should work very hard to prepare for your presentation and set up some solid ground to prove how profitable your business can be.
1. Research your investors beforehand.
No two investors are the same, so you’ll need to take your time learning everything you can about them to develop a personalized pitch. Find out what kinds of businesses they’ve invested into before and how those deals worked out. You should also look for any interviews posted online where the investor’s representatives talk about their values, goals, etc.
If possible, try to interact with potential investors personally before making the pitch. Based on this communication, develop a pitch that will appeal to their personal interests and goals.
2. Establish a positive online presence.
It’s never too early to start promoting your brand online, so you should launch a website and social media accounts as soon as you determine what that brand should be. Establishing a strong online presence is one of the most effective tools in your arsenal when you need to get funding for a startup. Having people recognize your brand and anticipate your product is a definitive proof of the business’s potential success. And that’s exactly what investors want to see.
Start with creating a good website on reliable hosting. iPage is a good option for startups because it offers top-quality service for a very low initial price. You should be able to afford the renewal contract with no trouble when your business picks up. It’s essential to have a reliable hosting service at the beginning as this will allow your website to manage surges in traffic.
Your website should have a blog where you will share news about your startup’s development and content that interests your prospective customers. Start promoting your blog through social media right away and try to establish connections with influencers in your niche.
3. Choose investors wisely and pitch on your level.
When you want to get funding for a startup you have to be realistic. Seeking money from an investor group that mostly deals with million-dollar companies when you are a small startup with moderate ambitions is hopeless. However, angel investors with specialization in supporting local businesses can be very interested in you.
The point is to choose the investors that match your level and create a pitch that will highlight this fact. Being realistic and presenting honest numbers and estimations during the pitch is very important. Investors appreciate such honesty and professionalism.
4. Show yourself to be a problem solver.
If you look up interviews with many investors, you’ll see how the majority of them mention that they want to see the business owner solving some problem for the customer. That’s the angle you should present your product/service from. Of course, you should explain how it’s efficient and overall wonderful, but first explain what kind of problem it solves.
By doing this you prove that your product/service has a place on the market and will become popular because it’s needed. If there is any direct competition for your business, show investors how your product is better than theirs and outline different ways in which you will advertise this to customers. To be useful and unique are the main things to aim for when you want to impress potential investors.