How to Attract Investors to Your Start-up
Any new entrepreneur knows that investors can provide more than just capital to their business — they can become resources for organizing, marketing, and realizing ideas. Mentoring and nurturing people with their ideas can be as important as the first seed capital funding that they receive. Sometimes an angel investor is akin to a good friend to someone as well as their business advisor. Being a multiple investor myself I wanted to share some tips on how to attract the best kind of investors for your start-up.
Tip #1 network everywhere
The wider is your networking circles the better it is for your start-up. Any casual conversation can turn into a valuable advice. If you see that you can help someone always try to show how they can benefit from knowing you. My gestures can be as simple as forwarding a relevant article or providing an introduction to someone who can further the person’s own interests. Today you help them and tomorrow they will help you. One can give you the right contact, other one might give a handy tip, third one will point on something important for your business. These little relationships are just really convenient.
I have met many of my investment company ideas when I was not even looking to invest or do business with these people. However I was always open and willing to accommodate such conversations however busy I was with other pressing business matters.
Tip #2 never forget to send a Christmas card, Birthday or anniversary to your ex-partners, colleagues, friends etc
Simple birthdays wishes or congratulations note can initiate further communication on other topics. Social Media makes this even easier that it ever was to maintain and grow your own network across the globe. Obviously the vast majority of the time you are staying in contact with these people because you like them and it’s interesting to do so. However there will be times that it can turn into a business partnership and you shouldn’t be afraid of making use of that when the occasion arises.
Tip #3 attend events for start-ups
These events also can be useful. The main tip is trying not to be invisible and not to be afraid of communicating with people in the room. Bear in mind that the worst what can happen is a response “Sorry I can’t do that”. When I was starting Antal I used to go to every possible recruitment event within the industry and I still attend some of them. These events are perfect for investors to learn about your business and have a chat about your vision and plan.
We are lucky in London and the UK that there are so many events for business going on all the time, use them to your advantage. It takes time, effort and sometimes courage to promote yourself in these environments but if you believe in your idea use that as a basis for your strength to go out and tell people about you and the idea.
Tip #4 invest your own money
Save a significant sum of your money to invest in your business before seeking investors for the rest. If you approach an investor after you have put your money on the line, they may take your idea more seriously. My question is always this: if you’re not willing to invest in yourself, why should I risk my money in your business idea?
Some people have unrealistic expectations about their start-up or idea an begin with fanciful valuations, the market will soon take care of these crazy expectations. Even though you hear stories of walls or lakes of money looking for a home, this money will not move unless the idea is fully tested on the founders ability to make it realisable.
Tip #5 Keep looking for ideas
Always be looking for ideas and opportunities because businesses are organic and spontaneous and they don’t have to come from formal business settings or scenarios. They can occur just as easily in a home or leisure environment as they can at a business incubator. How often do you hear your friends say that they have a great idea, why not challenge them to put that into practice.
#Tip 6 Business plans and forecasts – Don’t overdo it.
Whilst business plans and forecasts are important, don’t spend an interminable amount of time on them. Leave that to your financial astute and adept accountant or more numerically lucid business partner. You need to get out and test the market as soon as possible. Market analysis and preparation are for massive consumer product companies not for back bedroom start-ups. Remember the phrase ‘Analysis Paralysis’ this can kill a business. Get out there and see if it works and if it doesn’t work, change it until it does.
Whether your idea is going to work or not, a success will not come from a spreadsheet or a business plan.
Contact me to talk about Joint Venture opportunities and discover more about Antal investment schemes.