Anyone who has ever tried to launch a new business with limited capital knows how difficult it can be to find adequate funding. It takes a lot of effort and patience, as well as a commitment to be willing to burn the candle at both ends to get things off the ground. However, as difficult as it can be, finding backers is not impossible. There are unique and creative ways to try to attract investors’ attention, as long as you’re willing to dedicate enough time and can accept a lot of “thanks, but no thanks” before getting a yes.
One of the most common sources of funding for startups, or even for business expansion, are angel investors. There are a number of options, such as AngelList and SeedInvest, but don’t expect to simply pitch your idea and receive an immediate response. Make sure you’ve done your research and can present a well-defined plan. Then, be prepared to continually push your idea on the platforms, trying to make contact with as many people as possible. Even if you don’t find the financial support you need directly through the platform, you will have exposure and angel investors might see your project, forwarding it to their own network of contacts for consideration.
Kickstarter and Indiegogo are two examples of crowdfunding investment solutions that have seen entrepreneurs bring their ideas to life with a great deal of success. Instead of relying on one or two angel investors with extremely deep pockets, these platforms allow hundreds or thousands of individuals back a project, even if they can only put up a small amount of money. Since launching 12 years ago, Indiegogo has helped entrepreneurs attract well over $1 billion, while Kickstarter, which launched 11 years ago, has raised over $4.6 billion. The key is to offer an incentive that has tangible value to the consumer to get them to pledge even $100-$200. If potato salad can find incredible backing, there’s not much that can’t be achieved through crowdfunding platforms.
Angel investors and crowdfunding are fairly well-known forms of finding investments for a startup but they’re not the only options. Visit local business schools (or non-local schools if you want to take a road trip), especially those that have a lot of entrepreneurs among the alumni and faculty. That information shouldn’t be too difficult to find out – the names can be found on the website. From there, you only need to spend some time investigating those names to determine if they would make viable sources. Also keep positive – if you get rejected, ask if they can recommend your project to their own networks.
There are also a number of accelerator programs available everywhere now – YCombinator and TechStars are two of the more prominent options. These programs can typically be found at universities or through seed funds and investment firms and are designed to be boot camps that lead to the eventual launch of a project. They might last a couple of weeks or a couple of months, so you have to be prepared to dedicate the time.
These aren’t the only ways to find investments – friends and family, business contacts and any resource at your disposal can be tapped. However, make sure you’ve done your homework first, regardless of the type of funding you seek. Your project has to be thought out completely, you have to be ready to respond to any concerns or objections and you must have done the market research. Most of all, when it comes to grabbing the attention of investors, make sure you can show a substantial – but realistic – return on investment.