A startup is a project initiated by an individual/group of people aspiring to effectively develop and validate a scalable business model. Most of the time Start-ups refer to new businesses with new unique ideas that intend to grow large and make an impact on society.
The startup journey is full of disappointments, uncertainties, and huge failures at every step, but despite of all these hurdles there are examples of great impactful successful startup stories Due to limited revenue or high costs, most of these small-scale start-up opportunities cannot sustain in the long run without additional investments.
Startups are changing the world of innovations and opportunities by bringing in a new fast-learning dynamic business environment of opportunities. Startups are bridging the gap between age-old business policies and the latest new innovative ideas, where failure and uncertainty are easily acceptable and new innovations are built out of disruption.
Raising capital for your new startup opportunity is easier said than done, but one can always make the right moves well in advance and be prepared for the kill when opportunity knocks.
Startup investment is primarily buying a piece of the company with its investment where investors are putting down capital in exchange for equity: a portion of ownership in the startup and rights to its potential future profits.
In addition to financial benefits, Startup investment is extremely rewarding personally as you feel a sense of achievement by contributing to the development and welfare of society by job creation and capital formation. The USA is a great example of an unmeasurable flourishing prosperous economy, primarily because of the contribution and influence of many innovating startups who were encouraged by the supporting government policies and system.
Finding/ selecting the right investor for your dream project can be quite challenging at times, especially when you are not ready with your research work and the right knowledge. So for founders and investors both, this is quite a daunting task to identify whom to choose and when to choose for investing in.
Make an informed, smart assessment of your business needs, expansion plans as well as the type of investor you’re looking to get on board as there are different angel investors and venture capitalists (VCs ) out there.
As an investor and that too for a startup opportunity, it is essential to see how the project is going to scale down the line. In business earning profits is all that measures the level of your skills and competencies and nobody would like to invest their time and energy in a company that cannot stand on its own financially.
It is absolutely critical to see what competition the startup has and what kind of competitive advantage they have been able to establish themselves in the market.
Also, focus on all aspects of the company like customer development, size of the market and their approach for their product.
Carefully assess the finances of the startup opportunity to be clear of the roadmap they have planned for themselves. The founder members must be clear in their vision for at least 5 years and be able to share the plan for how to become a profitable company.
As an investor, you need to completely understand what, why, and how of the startup you intend to invest in. Having a good idea of the founder’s vision will give you a clear perspective to strategize.
In addition, try to understand if the funds that the startup is raising would be enough to accomplish important milestones it has planned for.
Pay special attention to how the startup has structured the deal and what percentage of ownership in the company you are receiving for the amount of money that you are investing in. Look at the articles of incorporation, by-laws if available, investor agreement, subscription agreement, term sheet, etc.
It is primarily to get yourself familiar with how the company is structured and who all are involved (directors, investors, advisors).
If you are new to startup investing for yourself and for others and are struggling to find deals, the best remedy for that is to go online. By registering on investment platforms you will be able to navigate onto a variety of deals.
It is important to learn about the market before making any type of investment.
The people behind running the show are the most critical factor in startups, it is crucial to understand them before investing in, it is all about having the right people sitting in the right seat.
By tracking their past achievements and records, you are focusing on their background story (previous companies, education, etc.) and what type of value they bring to the table. Also, it will prepare you to make an informed decision on your partners.
When you have finally taken the plunge and entered into this competitive arena, then make sure there is no looking back after this. Go all about it with a bang and make sure you have a team of innovative, enthusiastic, inspiring people with you, who support your dream project as their own.
In startup opportunities people with similar passions, goals come together to innovate solutions to a problem or dream they want to realize for the betterment of self and society. This bunch of innovative thinkers have a vision for themselves and society alike, but to fulfill that dream, they’ll need guidance and capital money from seasoned entrepreneurs.
In Silicon Valley and beyond, early-stage startups raise venture capital from VC firms and angel investors in various ways. There are two main ways to invest in early-stage startups:
Investors in later-stage startups (Series A or later) will more commonly invest in priced equity rounds.
After analyzing the whole scenario for investment, the most crucial point to prepare for is your meeting with the investors. Let’s learn about the details to look into when pitching into investors for your startup’s investments:
The most important thing to carefully plan is to create a crisp, concise and short pitch deck for the first meeting with the investors.
A pitch deck is a brief presentation, often created using PowerPoint, Keynote or Prezi, used to provide the audience with a quick overview of your business plan. Mostly pitch decks are used during face-to-face or online meetings with potential investors, customers, partners, and co-founders.
Talking to investors about investing in your project is one of the most challenging parts of any business startup. Most venture capitalists and angel investors have to go through a dozen or more pitches every day and frankly speaking, they don’t have the time and energy to go through each one of them. So, make sure your first meeting with them creates a solid impact
So as an entrepreneur, you need to identify dozens of people who could potentially be interested in your company and still choose amongst the list, the one appropriate for you. The good news is that there are lots of ways to reach out to potential investors, through various possible ways. Let’s check a few here:
Angellist is a great way to both learn about investors and let them learn about you. Creating a profile—including specific info about your company, product, and team members—makes it easy for people who are interested in your space to find you.
Once it’s there, share your profile with your friends and professional contacts and by doing so you end up following and get followed by a lot of new people from your own circle. Through them, you can get new pitches of interest to invest in your startup.
During the fundraising stage, when new investors follow each other or send requests with personal notes, it may lead to new business collaborations.
It is always convenient to have a wide network to meet potential investors, rather than individual meeting. But in the initial stages of the startup opportunities, it is always advisable to focus your wholehearted efforts on 30-40 main investors, who are a good fit for your business plans.
Prepare a strategy and take the list to other entrepreneurs for guidance, and then you can add or remove the selected few on the basis of their experience and guidance. Other people in the market/ fellow entrepreneurs are the best invaluable source of learning and expansion, these people can help you identify potential investors and people to avoid.
By carefully executing this phase of selection/ scrutinizing potential investors, you may end up creating the most beneficial list of investors to work with.
Networking is always the key to grow anywhere in any business because it provides you with the opportunity to interact with like-minded people with similar interests and motives to expand.
Most of the times it so happens that investors receive so many pitches that they hardly get the time to scan through them all. In such a scenario chances are that if you are going in with a reference through some common contact, you might be favored upon many others.
It is always beneficial for both the investors and the founders to have a commonly known angel investor, this way you always start on the right note by trusting each other completely.
This one aspect could make or break your game, so never ignore this part at all and design a thoughtful and carefully selected introduction.
Sometimes, you may find investors with whom you need to be extra cautious while reaching out to them. In that scenario, a well-crafted introduction is which sail you through smoothly from the initial barriers.
Investors are also looking for great startup ideas to invest in their hard-earned money so make sure you give them good reasons to jump in your project and contribute. Be there in the limelight to get noticed by the market, even if your product is in the pre-launch stage.
Start interacting with fellow entrepreneurs by writing guest posts or initiate a conversation on Quora to generate some attention for your group and motto. Just put yourself out there on display and start understanding the game well.