Home Resources8 Effective Strategies to Get Investors Interested in Your Startup

8 Effective Strategies to Get Investors Interested in Your Startup

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When you own a startup, it’s common to think about how to find and attract investors.

Having a significant number of investors can bring your startup to life. After all, running a business can be challenging to your finances, especially during the first few years.

To help you find an investor interested in your startup, here are eight tips that you can try.

Develop a Solid Business Plan

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It will be a huge red flag for many investors if they find that you don’t even have a business plan at all.

If you don’t want it to feel like amateur hour for your investors, make sure to develop a solid business plan. Don’t whip one up out of the blue to say that you have a business plan.

A business plan is not only for when you’re trying to impress investors. An excellent business plan is primarily for your benefit. It will help you track down your goals and critical information about the development of your business.

Your business plan will be your guide every time you need reminding of what your main goals are and what your next steps and priorities should be.

Show Results First
Inspiring your investors with the big-picture ideas of your startup is all good and well. But there’s nothing like cold-hard data and results to push an investor over the edge.

Although it’s accurate that you need money to make money, you can still make an effort to get initial customers or clients for your startup.

Having customers even without outside investment can convince your investors of market demand. Your investors won’t have to take your word for it when you can show them that you have several customers already using your services or products.

Come Up With a List of their Objections
Any savvy investor knows to ask questions about the potential hurdles standing in the way of the success of an investment. That’s why Michelle Dipp encourages startup founders to look for barriers of entry before pitching to investors.

As a startup, you want to make sure that you are adequately prepared for the discussions around your barriers to success. Therefore, you first need to figure out their potential list of objections. That way, you can prepare beforehand any answers that you may have to solve these possible objections.

It shows that you know what you need to fight through to achieve your goals, and you’re self-aware enough to acknowledge that you’re not an instant success.

Future-Proof Your Startup
Many mistakes that startups make are that they offer products or solutions that seem too reliant on their current desires and needs.

It might be “in” right now, but what about the future? What is your guarantee that your startup will still have a foothold in the market even if you’re no longer trendy or current?

You want to have an answer to that instead of crossing your fingers and hoping that you’re still relevant in the future. Future-proofing your startup will help you have the answers to some of the concerns of your potential investors.

At the same time, it’s a strategy that you may end up using for your startup anyway, so taking the time to prepare for that is to your advantage.

Prepare a Solid Marketing Research

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Usually, when you create your business plan, you should already have done solid market research for it. The reason why you need to prepare solid market research isn’t only to round out your business plan.

It’s also going to contain the answers that you can provide to your investors when they ask you about the viability of your startup. With your market research, you can provide evidence and show that you are solving a problem that has a market.

Any business that succeeds is simply solving a problem for a group of people. By investing in market research, you will have the backbone behind your pitch to investors.

Offer a Stock That Pays Dividends
During the initial years of your startup, managing your cash is critical to its success. Since you probably don’t have a lot of liquid cash reserves, you might not be able to sell your investors on your profits right away.

Offer a stock that pays dividends instead. Doing so will help you reward any potential shareholders without touching your company’s cash balance at all.

The side effect of paying with a stock dividend is that it dilutes the earnings that one can get per share. However, on a long-term basis, a stock dividend can benefit the shareholder if the company’s share prices rise. Also, stock dividends aren’t taxed until they’re sold.

Be Completely Transparent
The first people you’ll probably reach out to would-be family and friends. In this case, you should approach them carefully. That’s because they are less likely to build a boundary between your personal and professional connection in this way.

Thus, it would be best to be as honest as possible about your startup.

Although you can always pay them back, losing a personal relationship because of unmet expectations can be dreadful.

Don’t forget to treat them like any of your other investors who aren’t family members. Treat them with respect and keep them updated on all the information about the status of their investment.

Create a Persuasive Pitch Deck
Once you’re in front of your potential investors, you want to make sure that your pitch deck is clear and pleasant to look at.

You have to be careful not to rely on your pitch deck like a crutch when presenting to investors. At the same time, you don’t want it to look unprofessional and like a middle-schooler made it for you.

You want your pitch deck to weave and flow around your presentation and your speech. Also, avoid making it too eye-catching that no one ends up paying attention to you because your audience is too distracted by your pitch deck.

The tips listed above should help you be more confident in front of your potential investors. These strategies will help ensure that you’re equipped with everything you need to know when you’re about to pitch to your investors. You’ll be grateful that you prepared your startup pitch.

Gia Keasler

Gia Keasler is a contributing writer based in NYC. She usually writes about running and funding a startup and how to make it successful. She also do brush pen calligraphy as a hobby.

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