At some certain moment, every startup gets to the point of needing money in order to continue its existence and accelerate its growth. Looking for funding is a long process that requires a lot of effort from the entrepreneurs. But to make the fundraising more effective, the ultimate goal here becomes not just raising specific amount of money, but securing the right kind of funding.
Entrepreneurs, who are looking for investors, rarely think that they have the ability to choose. The competition is tough and the battle for the attention of the investors is very competitive. This is the reason why many entrepreneurs tend to accept the first offer they receive from an investor, without to even evaluate the offer well. Don’t settle for the good offer when you can find the best one!
If you are looking for the right investor for your startup, check out the following five points and consider them before you begin the fundraising round.
Know your options
Entrepreneurs must be prepared well before they start the actual fundraising process. It is important to know your options for securing funding according to the stage of your startup and the amount of money you are looking for. As an ambitious business owner, you should be able to speak the language of the investors in order to understand better the offers you are receiving and to adequately negotiate these offers. Get the terms right, understand all of your options and figure out the best configuration for your company at the moment.
Know your priorities
The different investors have different investment approaches. It is important to have a clear understanding of what exactly you are looking for to receive from the investors besides the desired amount of cash. Do you want to work with an investor, who is involved in the decision-making processes in the company? Are you looking for investor, who can mentor you and help you to expand your network? The answers of these questions will help you to determine better you needs and expectations and will guide you towards choosing a better fit for your company.
Do your research
Once you know your priorities and the qualities that you are looking for in an investor, it is time to do your research. Create a list of investors that you would like to work with. Look at their portfolios to understand better the type of businesses they are mostly interested in. Read interviews with them, where they discuss the main qualities they look for in entrepreneurs and in a successful startup pitches.
Craft the perfect pitch
Now you know your target group of people and have a glimpse on the things they are looking for in startups. It is time to craft the perfect pitch that will get you one step closer to meeting face to face with the investors. Prepare different types of your pitch that respond to the specific situation – craft an elevator pitch, 5-minute stage pitch, and a longer, more detailed pitch in case you succeed to get the attention of the investors. The pitch deck is the most important document at this very point, so make sure that you have it well-crafted, well-rehearsed and ready to amaze!
Attend the right pitching events
For entrepreneurs, one of the most challenging parts of fundraising is to find the opportunity to meet with investors. It is difficult to approach the right investor, because they are very busy and often overwhelmed by the dozens of business plans that they constantly receive. The best option here is to attend the right pitching events where you will have the chance to reach some of the most important investors in just a few minutes through your pitch on the stage.
