My answer to How do you get VC or angel funding for a start-up idea?
Answer by Raad Ahmed:
When you are ready to get investors on board, you need to go to them with more than just an idea. You need to show them that your idea can be executed and survive the marketplace. If you really want to put yourself in the best situation possible, I would suggest following a few of these tips:
- Network, network, network. You should reach out to other startups and investment communities to start making connections with folks that have influence. Talk to them, learn from them, get some general feedback. If you’re lucky (and prepared) investors may get excited about your business based on the information you provide and the questions that you ask. Even asking for advice from an investor may start the conversation for future investment. Showcase the fact that you have given things some thought and even considered issues in the future—you never know who that might impress.
- Be prepared to show results. Investors want more than your idea. They want to know that your idea works. It can be really difficult to obtain a customer base (even a very small one) without any money, but you have to do what you can do to try to get a customer so you can show that someone is interested in what you are selling. Think outside the box for ways that you can get your first customers without dishing out a ton of money that you don’t have yet.
- Sell your team. Include other people in your process because you are going to need them. Make sure that the investors are aware of your team members, their contributions, and skills. Don’t think that a one-man show is the way to go because for many investors, it’s shows that you are unrealistic.
- Highlight the gains. Let investors know what they are going to gain from working with you. That’s the bottom line that investors really care about. It’s great that you are excited about your idea, but what does it do for them?
- Seek out investors who are more than a check. Money is great and all, but look for an investor that wants to work with you and not just throw money your way. You can gain a lot of valuable information and skills by working with a seasoned investor.
There are a lot of tips and tricks that you’ll hear when it comes to this sort of thing, the main thing to remember is that you need to be prepared and organized when you approach an investor. Don’t waste their time and make sure that they have a solid understanding of what you are trying to do. It’s not an easy road, but it’s definitely worth taking your time and doing it right.
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