Wondering how to find an investor? Here are a few tips on raising investments for your new fintech project
Bright ideas will never develop into a fully-fledged business unless they’re adequately financed. Don’t despair if you don’t possess the necessary amount of money to fuel your startup. Few people do. Better to attract investors. Our article will assist you with that.
Top 10 tips on how to find an investor
1. Timing matters.
Before asking for investments, make sure you realize the value and potential of your venture. Imagine yourself an investor. Why would you find your own enterprise promising? Remember that investors are looking for original solutions to existing problems; a great executive team; scalability; growth potential; and shared values. Investment is not only about the money, it’s about impacting communities. Have you decided what positive change your startup will bring?
If you have only a vague idea about the future project, no prototypes of your products, no plans or team members, perhaps, it’s not the right time to approach investors. You should have a clear vision of the enterprise you’re going to build, understand the future operational process, and make at least a rough draft of your product or service. Many people don’t have that before their startup is on paper. Some get necessary understanding only while being actively engaged in the creative process. If you are not sure about where to start, you may tell others about that idea and get some feedback on it. Discussions often reveal unexpected aspects and alternatives.
However, don’t wait for your project to become finalized either. Raising the required funds needs time. It is good to start looking for investors early as long as you have clarified your goals and vision.
2. Narrow the circle of potential investors.
Decide whether you’ll start with VC or angel investors. Concentrate on those who have already invested in the fintech sector. Not only can you get their financial assistance but also their expertise and links will be helpful for your business development.
3. What to look for.
Investors can be found through your fintech friends’ recommendations; top business schools with strong entrepreneurial programs; online (AngelList, Microventures, or LinkedIn are all good resources); local angel investor networks; crowdfunding; investment experts; top accelerator programs; social networks, etc. Try out the FinTech Global resource (https://fintech.global/) or similar services. They use AI analytics to provide real-time data and insights on fintech opportunities. You should also pay attention to the annual ratings of the most active VCs.
4. Become a member of the entrepreneurial community.
Start getting familiar with your potential partners and investors. Join local and national fintech or startup groups on social networks, attend business events, presentations or exhibitions, and meet as many people as you can. Communication has great power. You’ll be surprised how vibrant and collaborative your local community can be.
Meet other founders in a similar position. You’ll give each other great insights and share individual experiences. They may point out both right and wrong directions and strategies. They can introduce you to some new connections. Perhaps, you’ll find yourself a co-founder, or another type of business partner. You can also get acquainted with the leading influencers in your field. They may give you some guidance and mentorship. If they are guest speakers, they often share inspirational stories and give advice.
5. Use your network.
After you have established personal ties with many people working in your field, you may reach out to them. The people who know you in person will better introduce you to prospective investors. As insiders, they can find a more personalized approach. They are more trustworthy than strangers. They may also be more passionate about your idea and ready to help. Of course, your introducers to the investing organizations should not necessarily be new acquaintances. Browse your circle of friends, classmates, and ex-co-workers too. There are high chances your college friends will get involved in the same sphere as you. Some of them may work in the company you’re interested in, or know someone who does. They say it’s a small world. Well, the fintech sector is even smaller.
6. Prepare for the business meetings.
Think about a brief, informative, and memorable presentation of your startup. Be ready to provide technical and organizational details if you need to. Due preparation will make you calm and confident. However, be also ready to improvise and answer tricky questions. Create a short and powerful business sales pitch that can be sent by email. Remember that business people value their time. Don’t waste it on vague descriptions. Be precise, provide strong and vivid argumentation, use rhetoric tools and all your charm. Before the meetings, prepare to hear “no”. Your enthusiasm about your dear project is not necessarily catching. You’ll most likely to hear a negative response in the majority of cases. Prepare psychologically so that it doesn’t kill your desire to succeed.
Even if your meetings with investors don’t bring forth any money, they are not useless. You should carefully listen to the arguments of the refusals. You may find many useful hints for improving your business ideas there. Some investors may give you valuable advice. Don’t ignore their experience.
8. Document everything.
Make lists of people and organizations someone has suggested to you. Make notes on every meeting or sent written requests. If some of the meetings were successful, make research on connected enterprises and those funded by your investors. Supply your lists with contacts and meeting details. Keep track of the follow-ups or requests for additional details. Don’t let your forgetfulness hinder the investment process.
By hit-and-miss actions, you’ll eventually master your presentation skills. However, if you realize you sound unconvincing and vague, you can additionally work on your skills. Raise your self-confidence, improve your communication and leadership skills, learn some persuasive techniques, and stay passionate. There are many resources online to become a better speaker and negotiator, as well as related courses.
10. Don’t give up.
Raising funds is a long and challenging process. Sometimes you’ll be tempted to leave this risky business idea and get back to your comfort zone. Taking the leap from your 9-to-5 and starting a business is scary. However, it is not as risky as you might imagine. In fact, startup founders all over the world tend to end up much better than their equivalently talented peers working in their offices.
Think carefully before giving up on your dreams. Hard work and strenuous effort usually pay off. Give it time, learn from your mistakes, search for more fund-raising options and constantly improve your project. Even if it doesn’t work out, you’ll have great experience in leadership and negotiations. Potential employers will surely appreciate that. You may also come up with other business ideas even brighter than the original one.