HOW TO ATTRACT INVESTORS

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An investor is anyone who invests money with the expectation of profit. He could be an individual, a company shareholder, a foreign investor, or another company, all of whom have varying risk tolerances, capital, and preferences. Startups are more expensive to establish and operate. That is when they look for investors to help them finance their operations. Investors help startups raise capital. They also provide valuable contacts, helpful advice, and motivation to work harder to grow your business. Entrepreneurs must demonstrate their ability to outperform other investment opportunities. Using a variety of strategies can help you gain the support of investors. Here are some ideas for attracting investors to your business.

1. Develop a strong business plan:

The first and most crucial step in attracting investors is to create a business plan. A business plan is a written description of your company’s future, a document that explains what your company is all about, the goals you need to achieve, who your potential customers are, what you intend to do, and how you intend to do it. An executive summary, company overview, management team, market and competitive analysis, sales and marketing plan, and financial analysis are all business plan components. Potential investors can see where and how they’ll fit into your business with a fully defined business plan, making future partnerships easier to establish. In short, it should be simple to understand and demonstrate a clear strategy for making your business idea profitable.

2. Avoid herd mentality:

To attract investors to your business, you must ensure that your product offers something new and unique while addressing relevant issues. If you want to invest in investors, doing the same thing as others is not the best approach. Many entrepreneurs take something that already exists and tweaks it slightly to stay in a different line. It is critical to consider ideas outside the box.

3. Ask for advice:

Instead of calling and emailing investors and begging them to invest in your company, try something different, such as seeking their advice. You may be able to build a good relationship with an investor by reaching out to them for advice. It may lead to them being more willing to invest in what you’re doing and allowing them to point out flaws in your business and ways to overcome them.

4. Social media:

Social media can be an invaluable resource for startups looking to attract investors. Investors typically have well-rounded LinkedIn, Facebook, and Twitter social media profiles. Connect with them and inform them that you are a dedicated follower. Investigate their responses and followers and whether they have previously invested in a similar industry. LinkedIn can be used to send cold messages and seek quality introductions, Facebook can be used to maintain relationships with investors, and Twitter can be used to have thoughtful conversations and engage with relevant information shared by investors. Spend enough time getting to know them personally and professionally.

5. Conduct Market research:

Find the right investor who understands your business segments by conducting market research. Start researching them in detail. Collect facts, ideas, and information and gain as much knowledge as possible about pitching and finding an investor. The motive is to show that your idea solves a real problem and market for the product/service. Further, it would be best if you also researched your investors to find information about their past investments and genuine commitments.

6. Obtain customer references:

Apart from meetings and discussions, investors like to refer to customer satisfaction regarding your products/services. Investors look to understand whether they are happy customers, what value the company brings to its customers, your procurement process, and what differentiates them from competitors. So, arrange for customers to offer interviews to potential investors when the time comes.

7. Be realistic with your pitch:

Getting attention from investors before you start discussing your business proposal is essential. Pitch after pitch may fail, but don’t be over-aggressive or defensive. Be patient and professional. The investor has to understand accurately when their contribution can begin bringing the return and how you will get them a return on their investment. Most importantly, rehearse your pitch, anticipate investor questions, and have answers ready. Please explain what is unique about your product/services, your targeted audience, and how you intend to acquire customers, and show them your exit strategy.

8. Explain your financial statements:

Financial statements tell a lot about how you operate the business. Simultaneously, they should be set out professionally in a spreadsheet such as excel. Show them the revenue model, expected cost, and profit prediction based on market research that you will use for your business to assure them that the money they are investing is worth the investment. Prepare a profit and loss account, balance sheet, and cash flow statement for the first five years. Prove that your business model and financial information are realistic and will become profitable to your startup.

9. Use brilliant sales tactics:

After the pitch, it’s time to utilise your experience and knowledge to sell this idea to investors.  Consider storytelling, exciting sales pitches, and soft-selling through networking as some ways to attract investors through sales tactics. Startups must convince investors that people are willing to buy their products or services and should have the potential to shake up the marketplace. You must show them what makes your product or service different from others, which means you must highlight your USP (Unique Selling Point).

10. Have co-founders:

Starting a company alone is overly complicated, so it is essential to have co-founders rely on it, which can be a vast upliftment. Find the right co-founder who introduces you to valuable knowledge, advice, and connections and makes the startup process easier beyond just attracting investors. Nevertheless, having the wrong co-founders can ultimately lead to the failure of your business. So, choose them wisely.

11. Solid Management Team:

Show that you have an innovative and strategic management team to lead the business. Investors seek a solid team with in-depth talent, skills, experience, and excellent business ideas. When the team members have had achievements in the past, it indicates they can succeed in the future. So, build a team that is efficient and passionate about working hard and contributes to startup success.

12. The way you present is extra essential:

Investors might meet hundreds of people in a month, so you need to be different in those terms to make the difference for them to consider investing in your business. Be exceptionally clear, compact, and audible about the words you are expressing in the event; otherwise, it is doubtful you can break the arrangement. Using the latest ways to present your idea will leave an admirable impression on your investors.

Attracting investors is an incredible struggle and a time-consuming process. It is especially true for startups because they lack a trade history. Today’s business world is rapidly developing, so if you are looking for ways to attract investors, you must be well-planned and prepared. Need help getting investors for your startups? Trust us to find the right investor for you!

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