SEARCH FOR AN INVESTOR FOR A STARTUP: HOW TO MAKE YOUR PROJECT COMMERCIALLY ATTRACTIVE
Do you have a business idea that will blow up the market, but you don’t have the money to implement it? The search for an investor for a startup over and over again ends in failure?
We will tell you how to present your project so that it is sure to receive funding, and warn you against the main mistakes of novice startups.
In preparing the mailing list, we were assisted by an expert from Moscow Business School, a specialist in crowdsourcing, and the head of the information portal “Rynokvzyskaniya.Russian Federation ” Alexey Bobko.
Where to find money and an investor for a startup
WHERE TO FIND MONEY AND AN INVESTOR
So you’ve put together a team, developed a product, and plan to market it. Where can I find money and an investor for a startup?
CONTACT INVESTMENT FUNDS AND USE PERSONAL CONTACTS: friends, colleagues, and acquaintances. There are not many contacts.
When my colleagues and I started looking for an investor for our first startup, we gathered about 50 contacts. At the time, we thought that was enough. But it is really a drop in the ocean. We could and should have found more. The same rule applies here as is used in trading. If one or two of the 100 used contacts worked, this is a good result.
Treat your project as a business that is already running and whose survival you are deciding on. If you didn’t manage to get into the investment Fund directly, try to do it through one of your employees. Don’t be complacent until you talk to someone who makes decisions. Do not accept refusals from secretaries.
IF YOU DIDN’T RECEIVE A RESPONSE TO YOUR EMAIL, YOU DON’T NEED TO ASSUME THAT YOU WERE REJECTED
Sending an email is an attempt to convince yourself that you did your best. Don’t kid yourself. Until you’ve had a live conversation with a person, you haven’t done everything possible to get your startup invested.
LOOKING FOR EXTERNAL SOURCES OF SMALL BUSINESS FINANCING? DON’T STOP AND DON’T GIVE UP
Sometimes luck is just one step away from you!
I participated in a startup dedicated to creating an app for the used car market. The project brought together people who had the necessary skills and connections to implement it. But the team broke up at the stage of attracting investment. Bets were placed on large funds, which responded with a series of rejections. And we didn’t have enough perseverance. And just six months later, two similar projects appeared on the Internet at once. It turns out that if the team did not give up, one of the projects on the market could be our startup.
Investing in startups: how to argue?
INVESTING IN STARTUPS:
HOW TO ARGUE?
You were called to a meeting. Present your idea so that people will believe in it!
TELL US ABOUT THE POTENTIAL OF THE PROJECT, LOOK FOR INVESTMENTS ON THE INTERNET
It is important for an investor to understand when the project will begin to generate revenue. Investing on the Internet will show that there is interest in you. Ideally, if your startup pays off within the next 1-3 years. Don’t forget to mention who your customers are. Conduct market research and indicate where you see your place.
A crowdfunding campaign conducted on the Internet can provide a very good help in assessing the interest of potential customers. Perhaps the investment collected there will not be enough to Finance the project, but if your startup arouses interest among users, it will be a great trump card in negotiations with an investment Fund or private investor.
TALK ABOUT WHAT THE INVESTOR IS INTERESTED IN AND GET PROJECT FINANCING
Describe the benefits of working with you. Money is always an argument. But find something else to get project funding.
It is important to understand what kind of investor you are, what projects they are interested in, what they do. After evaluating all this information, show that your startup will be a good investment in its portfolio of projects. If your invention is innovative and interesting, aimed at improving the quality of life of society, it will certainly attract the attention of the press. And the investor will get not only profit, but also good PR.
ASSEMBLE A READY-TO-WORK TEAM
Very often, investors are willing to invest not in an idea, but in people whose capabilities they believe in. Show that you want to work and develop, and you will get funding for your project.
CHOOSE AN INVESTOR AS A BUSINESS PARTNER
After all, this is not only a person who will provide your project with funding, but also can help you with administrative resources, attracting their experts and analysts to work on your idea… If you see that such cooperation will not work, consider looking for another investor. Money is fine, but sometimes the lack of partnerships can slow down the development of your project.
How to convince people to invest in a startup
HOW TO CONVINCE PEOPLE TO INVEST IN A STARTUP
When preparing to negotiate with an investor, think not only about what to say, but also about how to do it. Here are some tips to help you avoid common mistakes when making a presentation and convince an investor to invest in a startup.
FOLLOW THE 10/20/30 RULE
It was created by guy Kawasaki, managing Director of Garage Technology Ventures, a venture capital firm that specializes in high-tech startups in Silicon valley. Give your idea succinctly and succinctly. Don’t try to fit all the details on the slides at once. Specify the main thing in a 20-minute presentation consisting of 10 slides written in 30-th font. This will show the seriousness of your intentions and convince the investor to invest in your startup
KAWASAKI OFFERS THE FOLLOWING PRESENTATION SCHEME THAT IS INTERESTING TO INVESTORS:
The underlying “magic” / technology
Marketing and sales
Forecasts and milestones
Status and timeline
Outcome and call to action
CREATE AT LEAST THREE PRESENTATIONS DESIGNED FOR DIFFERENT TIMES OF THE CONVERSATION WITH THE INVESTOR
For example, for a short discussion, a text of 30-40 seconds will be enough, supported by 3-5 slides shown on the tablet. If the investor wants to learn more, open the second presentation for 5-10 minutes. If they are interested in the idea, you can send them a long version with all the details by email.
WHEN WRITING A SPEECH FOR ELEVATOR PITCH, FORGET ABOUT THE ELEVATOR
Just make a brief description of your idea that will interest the investor.
Your task is not to tell everything, but to arouse interest. In the language of a sales Manager, make a potential investor think about whether he is doing the right thing by not paying proper attention to your project. If they have any doubts during these 30 seconds, it means that they are interested, and they will give you another 5-10 minutes to find out the details.
BE NATURAL, POSITIVE, DON’T CHATTER, TELL YOUR STORY CALMLY AND CLEARLY
And don’t forget to prepare carefully for your performance the day before. You may not be a great speaker and speechwriter, but if you rehearse your speech 10-20-30 times in front of a mirror, you will already be better than half of the existing speakers, because you were preparing. And your efforts will be noticed.
DON’T BE AFRAID TO ASK YOUR FRIENDS AND ACQUAINTANCES FOR ADVICE
Many keep their thoughts to themselves, fearing that their idea will be stolen. However, the chances of such an outcome are relatively small. But the critical questions and comments that people will make when they first hear about your project will certainly help you change it for the better.
Use these rules, and if your idea is really interesting, and the desire to implement it is great, you will definitely achieve your goal!