Tech startups and small businesses need the right kind of funding during the formative years to ensure business continuity and support growth and expansion plans. Seeking outside investment will also provide you with the means to spend more liberally on tech, materials, and other assets that can give your enterprise a competitive edge. The volatile nature of modern business means funding is often required at short notice so you should always be ready and willing to attract interest from new investors.
More than money
Angel investors, local enterprise owners, and venture capital companies provide the money you need to drive positive business actions but they also offer a range of other benefits to startups. According to Triangle Angel Partners president, Jan Davis, startups should “look at the whole package” when seeking investment. Investors can often bring valuable connections as they can put you in touch with professionals and other clients who can accelerate your business and increase your chances of long-term success. These connections can help with sourcing suppliers, manufacturers, consultants, and contractors. Investors can also provide much needed expert advice and experience during difficult periods.
While receiving an offer of investment is potentially huge for your business, you must be sure that you pick the right investor. It is important not to give up control of a large stake of the business or opt for someone who is unwilling to provide regular help and advice as and when you need it. You also don’t want a third party who is intent on contacting you numerous times during a working day. Balancing this fine line and finding someone who is compatible with your ethics, culture, goals, and objectives is critical. Successful Investors, such as the renowned David Kiger, will also conduct due diligence on their part to ensure the match is just right.
The competition for investment is only going to get tougher as more startups are registered so you must set your enterprise apart from the rest by attracting intention via creative marketing initiatives. Experts recommend presenting yourself as a ‘thought leader’ in your industry. Instead of focusing purely on the core product and short-term gains, make sure to talk about future trends and your knowledge of the market. According to Valery Bollier, co-founder of popular web-based soccer game Oulala, the “storytelling effort” for a particular product or service must be about the wider sector rather than just “your own little brand”.
The oft-repeated mantra that it’s not what you know it’s who you know is never more pertinent than for tech startups. It will incredibly difficult to attract investment if your business is not visible across a multitude of digital touchpoints. You should have a corporate website and social presence and this should be backed up by a robust online and offline networking strategy. Regularly visiting conferences, mixers and events will also give you many opportunities to meet potential investors. Also ensure you are ready to showcase your ideas through a working prototype or product and an informative presentation with in-depth information, facts, and forecasts. Remember to make realistic projections because smart angel investors will often be deterred by erroneous revenue and growth predictions.