7 Strategies for Getting People to Invest in Your Business

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(Investors seated around a table.)

BY YOUNG ENTREPRENEUR  COUNCIL

Entrepreneurial Q&A: How do I get people to invest in my business?

A: Try the “soft sell” via networking. “If you’ve been building a great business, getting out and networking within the local startup and investing community can be a great way to meet investors. Most of my meetings with investors developed by being out at an event and mentioning my business. If they seem interested in your business, they will keep the conversation going. Letting things happen organically can yield great results.” Diana Goodwin, AquaMobile

Show results first. “Particularly if you are a first-time entrepreneur, it will be much easier to get investments on good terms (particularly from non-institutional investors) if you have some traction first. Make a plan to get your first customer that doesn’t depend on huge outside investment.” John Rood, Next Step Test Preparation

Have co-founders. “Starting a company alone is very difficult. Having partners gives you people to rely on, which can be a huge boost for your company. Angels and VCs often look for talented co-founders as opposed to a single founder, which is a rarer case.” Ben Lang, Spoke

Join a startup accelerator. “For first-time entrepreneurs with no direct VC connections, I recommend applying to reputable startup accelerators that can lend their network and credibility to your startup. Graduating from a top accelerator such as Y-Combinator or TechStars does not by itself guarantee funding, but it can significantly improve the odds that you would raise a follow-up round at a favorable valuation.” Vishal Shah, NoPaperForms

Follow through. “Fundraising is usually not a quick process. Engage a potential investor before you actually need the money. Tell them where you are currently, where you will be before closing the next round and what the new capital will enable you to do. Get them to agree that the metrics make sense and then hit them. Everyone likes someone with a track record of doing what they say they will do!” Douglas Hutchings, Picasolar

Have users. “Your users’ reviews are your best weapon going into a pitch. We have a spreadsheet with a list of our top customers. For each customer in the list, we include additional data such as quotes from the customer, how much they pay, how long they’ve been a customer and how many times they’ve upgraded their software plan. The spreadsheet shows you care about results.” Nanxi Liu, Enplug

Make something out of nothing. “Build something first, whatever business you’re in. Do it as scrappy as you can, and get users and/or revenue. There are many ways to do this thinking outside the box. Investors are much more comfortable with a proven business system that is already starting to win people’s money.” Jay Johnson, Small Lot Wine

(SOURCE: TCA)