As an aspiring or new entrepreneur, you have built a minimum viable product, explored an idea or even managed to drive some traction towards the product you have built. Now you want to scale and to do so you want to raise funding. How does one go about the same?
Approaching investors may sound like an uphill task especially if you are a first-time entrepreneur and approaching the right investors could be even more challenging especially given the fact the investor ecosystem has thousands of investors each with their own set of skills. Here are some steps you could take to while finding the right investor
Look for value-added capital vs just capital
Startup investing is commoditised. The massive influx of capital and opportunities in India’s startup ecosystem has led to a surge in investors willing to invest in startups. Traditionally new founders raised capital from Friends and Family first. Now new founders are increasingly raising from Friends, Family and other Founders.
In an increasingly competitive startup ecosystem, look for investors who possess the relevant domain expertise you are looking for alongside capital. If you are building a SaaS company, look for investors who are former or current SaaS founders or investors. The same goes for any other domain you might be building for - D2C, Fintech, Agritech and more.
Founders or investors with domain expertise not only will be able to assist you with funding but also serve as a sounding board in your journey.
Do your research
Before you approach investors research and study about them on social media, news articles, blogs, listen to podcasts etc. We live in a world where information asymmetry no longer exists hence your research will tell you about their investment thesis, the kind of founders they work with, their past investment record, their personality and more. This will also help you to narrow down your pitch and tailor your pitch deck accordingly.
Do away with the spray and pray strategy
Investors are extremely busy and receive dozens of pitches every day. Most angel investors also hold positions at large companies hence they are juggling between roles of an angel investor and a full-time employee.
If you are cold calling, emailing or even bombarding them on social media to dozens of investors at a time, then your chances of receiving the desired response from them would be minimal. Be extremely strategic and focused on who you want to approach and why are you pitching to them. Use your research to craft a short, crisp and relevant “elevator pitch”.
Establish your reason to exist, a reason to win & why you are pitching to them?
Articulating your purpose and messaging in why you will win in the domain and why you exist to solve the problem better than your competitors will help you stand out from the rest.
Bring out the problem you are trying to solve succinctly without any jargon. Put yourself in the shoes of an investor. They are busy individuals who get flooded with pitches all day. Hence at most, you will only have a few seconds to catch their attention.
Having done your research, communicate honestly why you are pitching to a particular investor. Investors really appreciate it when you have done your due diligence about them and are able to understand their approach even before you speak to them.
We hope these tips will help you successfully pitch and garner interest from investors.
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