How To Find Investors For Your Business Startup

How To Find Investors For Your Business

Investors play the role of pillars for a business startup and there are many investors available in the startup business market. All startup investors have different terms, policies, and investment criteria. 

Before dealing with any investor, you must know about all their capital rules and expectations they have for your business. 

Here are five ways you can find an investor for your business startup:

  1. Venture Capitalists
  2. Online Platforms
  3. Social Media
  4. Business Plan
  5. Equity Financing

To find out which of these methods will suit your skill-set and your business model specifically, let’s take a closer look below.

1. Venture Capitalists

Venture capitalists are investors who provide private money to grow a business and are not part of any investment organization nor do they provide investment through a partnership. They have their own money to invest in the start-up business, and in-return get a profit, according to the predefined rules set. 

finding a venture capitalist
Finding your first investor can be particularly daunting, but don’t let this stop you from ensuring they are right for your business.

One of the biggest advantages to approaching venture capitalists, especially if you’re early in your startup journey, is that they are easy to contact. Some websites provide the facility to ask for investment from these investors, alternatively you can track down and contact potential VCs on LinkedIn

If the CV considers your business to be profitable and they feel they can add value to your business, they will likely invest.

2. Online platforms

There are many online fundraising platforms from which you can find investment. These platforms offer loans for businesses, crowdfunding or donations and are designed to be incredibly user-friendly and accessible to a wide range of audiences.

Some of the most popular fundraising platforms include:

My recommendation is to focus on one or two platforms, populating them with as much data, branding and activity as possible rather than trying to cover as many platforms as possible. This is how you get noticed. 

3. Social Media

Social media is a fantastic source of business advertisement both in generating sales and in generating brand awareness. Both of which a potential investor will want to see.

In similar fashion to fundraising platforms, if your goal is to raise investment, focus on fewer social media channels than trying to cover every single one.

Using Instagram to attract investment

In similar fashion to raising your series A, an investor will be browsing your Instagram to see traction. They will want to see some evidence of people caring about your product and your brand. If they don’t, this may well be the first and final place they consider your business for investment.

Traction can be best demonstrated through a number of ways:

  1. User generated content – images and videos of customers using and advocating your product.
  2. Reel content – Investors will be as aware as you are, reels generate more exposure than any other type of Instagram post, so get in-front of the camera and represent your brand.
  3. Followers – investors are time-poor so demonstrating traction through one figure will always bode well, just ensure your following is high quality as well as quantity.

Using LinkedIn to attract investment

Don’t hold back and allow your LinkedIn feed to be a timeline of your startup’s achievements. Transparency is key here, and potential investors will be looking for success statistics and engagement from stakeholders. These can be posted on your personal and business LinkedIn profile.

posting on linkedin to find investors
LinkedIn serves as your achievement and growth feed – don’t hold back, celebrate your milestones.

Posting the following on your LinkedIn feed will bode well with investors:

  • New team members and their credentials – e.g new marketing staff
  • Growth statistics
  • Investment gained from other VCs

4. Business plan

Before investing in a new business, investors check the business plan. If investors find your business plan shows a clear value offering and traction metrics, then they will surely invest in your business. 

Your business plan should be strong enough financially and offer realistic exit points so that investors do not doubt the loss of their investment.

Tip: Investors like to invest in businesses that have high chances of profit, therefore it is vital that your business can demonstrate market demand and show early revenue generation.

5. Equity Financing

Equity financing is an investment method, where a person invests in your business for a share in the business. You can easily access equity investors online or from your friends and family. This investment method can be an effective way to enhance your business.

Choose investors and an investment method carefully, because if you want to enter into a partnership with any investor, there are different rules to be followed and they will get profits according to the shares they have in your business.

investment from a friend for your startup business
Investment from friends and family may seem like the easy route, but they will be expecting a return as much as a VC will.

However, if you want to be the only owner of the business, then avoid investors who look for a partnership, i.e, venture capitalization and equity financing are not suitable.

At Velocity Capital, we invest in digital-first direct to consumer companies with unstoppable founders. Does this sound like you? Get in contact with us to find how we can provide early stage capital funding to your business, and view our current investments to see who we’ve worked with so far.

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It is the most complex process an early-stage company must go through. A channel is not just about the name of providing a platform to sell. The confusion is common. A channel where you position the product might take you to the platform where you sell, but not all the time. In other words, it represents the medium where you can get the greatest audience reach, potentially the cheapest way to have huge visibility. An example could be TikTok, an amazing channel for specific types of products for video materials and most important catchy viral trends. The platform where you sell could be Shopify.Assessing which channel works best for your company and particular product is a complete process or a series of steps that follow to achieve business goals.Choosing the best channel refers to the selection of a platform that fulfills all the requirements to meet the expectations of the business owner. It starts with assessing the customer personal, social, and demographic characteristics which feed into your decision, but it then expands to data you have available from tests across multiple channels and data you enhance to get better insights.In is quite normal to change strategies depending on specific product ranges, countries and even type of content to enable you to optimise the cost of acquisition.You might want to consider the following while you search for the best channel for your product:Cost-effectivenessCost-effectiveness is a way to determine that whether this channel will prove economically viable for your business or not? Does it require more resources or money to maintain or run the activity on a particular channel, or creating the content?Some businesses in the venture capital space at times run campaigns at a loss, they pay more for a lead than they get in Lifetime Value. It is acceptable if you are just launching and creating a buzz about your company.The same strategy could be completely unsustainable in the long run.Ease of accessThe best channel provides you the ease of accessing the products for customers. It enables you to be first to the audience, building loyalty, a community feeling. They buy your content and values as much as your product.If you are selling to the gaming community, you may consider YouTube Gaming or Twitch. If you are targeting young professional mothers as an audience, you may consider Facebook or LinkedIn.Every customer profile will demand a different approach. Ask yourself where your ideal client is spending their time, and how much of it. Run tests, validate your assumptions. Learn and test some more.Marketing and CreativesThe most expensive element if find the right channel is creating engaging content to promote your brand. It is much easier to get virality with video than any other form of content, yet the production usually sets a high bar which start-ups cannot meet.It is easier for established brands to get mass publicity just by virtual of having budgets dedicated to curating and producing the best channel appropriate content.In early-stage, founders are faced with challenges, and you always must compromise on key elements, select the marketing and creative collateral that are within the means given. Building on what works at one level is the best way to progress towards more expensive strategies, potentially involving TV ads, videos, and celebrity endorsements.Small businesses face substantial hurdles while opting for a good channel for products. While choosing the best channel proper guidance is very necessary. You must keep in view all the above factors to select a beneficial channel. Improving on this process will enable you to find faster, cheaper ways to reach your audience, improve your brand recognition and increase conversion.

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