Are you wondering how to find the right investors, who will not only invest capital in your startup but share their knowledge and business network with you? Check out the list of tips we created to help you out in the first article of our Startup Survival Guide blog series.
1. Search for investors who invested in similar companies
Investors like investing in what they are familiar with. Do some searching and find investors who invested in a similar company as yours in the past. Let’s say you run a FinTech startup in Germany. Conduct thorough online research and find investors who have invested in similar successful FinTech companies in your area in the past. Reach out to them and share your business proposition. Chances are they might be interested in investing again if they invested in a similar company before, and it went well.
2. Search for founders who have recently exited a similar company
Successful founders often look to close the loop and invest in exciting new startups. Finding them also requires thorough searching. Try to find founders who have recently exited a company similar to yours. Let’s say you have a MedTech company. Look for MedTech founders who sold their company in the previous year or so and contact them. Maybe they’re willing to share their list of business angels. And even if they don’t recommend their own investors, they could definitely recommend someone they crossed paths with, but he/she didn’t end up investing in their startup. Try not to contact them in the first couple of months after their exit, as it’s likely they will still be too busy to respond to you.
3. Make sure to attend networking events
Do you attend online/offline startup networking events regularly? Investors are often also looking for great startups, and participating in events can be a good way to build your network of investors. Pitch nights, demo days, and public events of that type are worth going to, even if you are just there for the networking drinks. Besides the events you can find at startup accelerators or co-working spaces, make sure to join Leapfunder’s signature Round Table Session online event. Those are all about connecting the right investors to the right startups.
4. Spend time with other great startups
Investors are looking for good deals. Wherever there are good startups, there will be investors. If you are based near a good accelerator, then you might want to mix with those folks. You could also join a good accelerator as a participant, but keep in mind that it often comes with selling your shares to them. Sometimes just sitting in the right co-working space gets you valuable visibility. Where the good startups sit: the investors are bound to visit.
5. Read through online resumes like a detective
If you go on LinkedIn or search on Google, you’ll find a lot of people calling themselves angel investors. In some cases, the people who call themselves angels online are barely active angels at all. Often, business angels like to keep a low profile. You can still find them, though. Look for people who are in non-executive roles with their companies. Look for people who might be on the advisory board of similar companies to yours, for example. There are a lot of little signs that someone has become financially independent but is still actively interested in being a player in your space.
6. Look through your customer base
Often the very best investors are your customers. A customer who really loves your product will understand what is cool about your company a lot faster. You would be surprised to discover how some of your customers actually would like to become a shareholder.
Keep in mind that good startups always attract good angels. Don’t feel like you have to chase someone. However, make an effort to clearly communicate that your business is doing well because that attracts angels. The next step for you as a startup founder is to learn how to properly talk to investors. You can learn that by joining our online Investor Readiness Session and by reading the next articles in our Startup Survival Guide blog series.
Stay tuned for more knowledge and learn how to survive and strive as a startup.
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