Getting funded is tough. Whether it’s angel investment or venture capital you’re after, your chances of actually finding investors are slim. The following are three ideas for helping you secure the capital that your startup needs.
1. It’s not just the idea, it’s the people.
Sure, a revolutionary idea, competitive advantage, or even an initial small user base could mean success. Lots of people have made a killing because they fell into the right idea and ran with it. Look at Facebook, MagicJack, Dell, or even Ford Motors. Each of these companies started with a great idea, ran with it, and made money. So why shouldn’t an angel investor invest just because of your idea?
The reality is, many of the most successful companies hit their home run after multiple pivots. In a non-B2B environment, it’s asinine to assume that you know exactly what the customer is going to want from the get-go. To dramatically increase your odds of hitting it big, you’ll have to pivot hard and pivot often. Thus, an investor needs to see that you and your team are capable of seeing past your idea. You need to show that you’re actively seeking data that will direct your pivots. You need to show that you—and not just your idea alone—should be invested in. At the end of the day, if an idea doesn’t succeed, a great team can find one that will.
2. Build a slam-dunk pitch.
This point might seem obvious, but Brad Feld says most of his decisions to invest were made after just one meeting. Aside from some investors dragging out the due diligence process waiting for you to get desperate for cash, your time with a potential investor will most likely be brief. Build a solid pitch outlining your business plan and highlighting the unique traits of your startup. Your chances of getting funded go up exponentially if you already have some revenue or a small user base, so make sure to highlight that you’re already getting positive feedback from the market. And don’t forget to pitch your team too.
3. Make a great first impression.
The angel community is tight-knit and relatively small across business segments. The most active investors will run in packs and share deal flow. Thus, if you botch your first meeting with a potential investor, his whole network of peers could be closed off to you. Conversely, if your pitch is really impressive you might end up with access to capital through multiple individuals in the investor’s network.
Brad Feld recently wrote a great article directed towards angel investors. Read it here for the other half of the story.
Getting funded is extremely difficult, whether it’s angel or VC money you’re after. Check out The Roach Post’s resources for entrepreneurs, including our Downloadable Example Business Plan and How I Raised $55 Million Of Venture Capital In Two Months, both by Eric Roach.
