Whether you are an entrepreneur, working on your startup project or a full-time employee considering startup as your path to quit your boring job; you will face one key problem. That is the issue of investment. It is true that lack of capital is one of the major reasons why most people are not able to fulfill their startup dream. At the same time, it is also true that there are investors who are as hungry as you to find out promising startup projects where they can invest. These investors have a huge amount of capital for investing. Let us find out some effective techniques using which you can attract these investors to take interest in your startup. And how you can convince them so that they invest money into your startup project.
Finding suitable investors
The most crucial and vital step towards forming a promising startup project is to find investors who will provide the capital. If you are assuming that your startup project is so appealing that the venture capitalists, angel investors will readily contact you to invest; you are completely wrong. First of all, you need to understand one plain fact i.e. these individuals or companies don’t have time to search the internet to find promising startup projects. That would be futile wastage of their valuable time. At most they could go through different online publications where they usually find news about different startups from around the globe. Now if your project gets featured in one of these publications through guest posting or other means, it may yield the result that you are wishing.
Another way is to contact these capitalists, investors directly. In order to do so, you will need to have the contact information of them. Unless you have some references or contacts, it is almost impossible to contact these investors directly. What is more, entrepreneurs are so busy developing the startup itself, they usually don’t get enough time themselves to do research and find the contact information of the investors.
Approaching the investors
Once you have the contact information of the investors from where you are seeking capital, you need to approach them tactfully. Remember these investors have dealt with entrepreneurs like you before. On the contrary, it may be the first time that you are contacting them. Therefore you need to do your homework diligently. Otherwise, you may not be able to convince the investor to invest their capital into your startup project. Make sure you don’t sound too desperate while approaching them. They will instantly sense that and reject your application.
Once you are able to convince the investors of your startup project’s prospect, they will decide to invest capital into your company. Now many entrepreneurs assume that they have overcome the biggest hurdle which is actually not true. After they agree to invest, you also need to work on the investment terms. Make sure the investment agreement is profitable for you because they will wish to have the maximum profit from your startup. You need to understand that these investors are just money-hungry sharks and their investment terms will reflect that. Therefore it would be wise to discuss relentlessly with the investor in order to make the agreement in your favor. If needed, you can also take legal help in case of a bigger investment. However, in most cases, legal help is not needed.