22 Mar Effective Ways to Attract Startup Investors
We know that each startup investor is different, and each has their own plan of criteria. Some may construct their choices simply in light of the facts, while others may be more disposed to consider their vibe for the people in the team. Some might be in the right attitude for risk-taking, while others may play safe, or are just looking how it pays out.
Despite the wide variety of startups they may look for investment, the matter is that they are several boxes that just about every investor likes to check before they will invest, either money or additional time.
Make a Dynamic Market Opportunity
This is where most investors will start. How big is the addressable market that your company is looking to serve? Big is defined in terms of not just today, but the future as well. If it is a market with existing solutions, be prepared to spend a lot of time explaining how your solution is different from your peers. If it is a new, emerging market, the focus will be on how big the market is expected to get and what is driving its growth. Startup investors understand which dynamic market that give them good opportunity in investment. So, convince them well!
A potential investor will keenly look into why your team is well positioned to build and execute a plan and become a market leader. What kind of domain expertise does the team have that makes them an authoritative figure in the market? Does the team have complementary skills as it related to sales and marketing, product development and operations? Is there a strong chemistry on the team and does everyone play nicely with each other? These are several of the criteria investors will be looking for, so it is important to highlight as many of these as strengths as possible.
An important way to decrease the risk of an investment opportunity is to show investors that you are not just talk, but have already begun taking action to build the business. Demonstrating that the market is already engaging with your product and providing useful feedback will set your startup apart from many others that are still sitting in the laboratory.
It can be quite powerful to throw real data into a conversation that supports your claims, or perhaps even forces you to adjust assumptions that you have started with. Furthermore, it reflects the commitment and initiative that the team is making in order to make things happen.
Do not underestimate the importance of investor fit. If there are multiple connections between an investor’s strategy and your startup, the startup investor is likely to get more deeply engaged and the fit becomes more obvious. Doing your research upfront will pay dividends and ensure that you do not spend a whole lot of time with an investor who ultimately is not a natural fit.
How about your business? Does it good enough to get investment from the investors?