Thinking of starting your own company? First, you’ll need to know how to find investors to fund your startup.

Most entrepreneurs who are looking to start their own company know it’s not just about having a solid plan of where they’ll take the company in the next few years. It’s not what niche they are going to go into, or the best practices within their own industry. No, it’s about money – AKA startup capital. That’s why you need to know how to find investors.

Successful entrepreneurs and business owners know they need cash on hand if they want to succeed. Research shows that most businesses fail because they lack capital. Without an adequate source of funding, they won’t be able to maintain their operations past the first 5 years of business – which is the crucial moment in time when most businesses fail.

Think of capital as a safety net. Every time you make a mistake in business, it’s going to cost you money. The more money you have, the more mistakes you can afford to make. This is why having capital is very important, and you need investors to raise capital. Compared to a startup with very little money, the companies that knew how to find investors can afford to make more mistakes. And you will make mistakes which will cost you money.

Those who started a business with very little capital (and no investors) only afford to make a few mistakes before they go bankrupt. If you’ve never tried to grow a business before, you’re sure to make plenty of mistakes.

how to find investors

Having capital allows you to endure through those tough first few years, and eventually build up your business to become successful. If you’re looking to start your own company, here are a few tips on how to find investors for your startup launch:

Perfecting Your Business Presentation and Pitch 

Before you even begin to look for investors to fund your startup, you should have your pitch down. Have a well thought out presentation that is visually appealing. Documentation of your plan and what you have in mind. The niche and industry you are going to go into. Your expenses, operations, estimated profit and yearly revenue. And most importantly, what’s in it for the investor.

Remember, everyone on this planet is tuned into the radio station WIIFM – What’s in it for me? Realize that from an investors point of view, they are taking a risk. They don’t know who you are, if you are trustworthy or if you’ll even succeed. Worst case scenario, your business could fail, and they lose all of their money invested. Your job is to help alleviate these doubts and fears, and assure them that you are going to succeed.

To do this, focus on tailoring your sales presentation to how it can benefit your investor. Are they getting a 10% equity in your company? Will they get royalties on every product or service being sold? Make it clear that if they decide to do business with you, they are going to get a nice ROI. A little bit of greed in business is a good thing – if you can cater to that side of your investors, they’ll think less about what they have to lose, and more about what they have to gain.

Give them enough reasons to believe they have more to gain than lose, and they’ll have the confidence to say yes. And, if you come across as confident in your well-rehearsed pitch, they’ll be more likely to feel confident investing.

Before You Become a CEO You Need to Become a Salesperson

During the actual presentation, your role is going to be that of a salesperson. Your company does not yet exist – it is simply an idea in your head or on a piece of paper. You are trying to sell your company and vision to the investor, and to do that, you need to convince them that your plan is going to work.

how to find investors

Before you even become the CEO of your own company, you first have to become a great salesperson. Being a visionary and sharing your passion as to why you want to start a business in the first place is good, but unless you are able to clearly articulate your thoughts to the investors, you will never have a chance at succeeding. Spend time to craft your pitch carefully, practice your speech over and over until it comes second hand, and then take action. 

This is where skills like closing become very useful. If you have experience doing sales, you will have a much easier time getting over your investor’s objections. Being able to redirect the conversation will allow you to get to the core of what your investor is really after – getting a positive ROI. You already know what kind of outcome they are looking for, all that’s left is to lead them towards that result. Treat them like you would treat a prospect, and get them to say yes.

Having your pitch down and solid documentation of how you are going to get there, is going to help influence investors to believe in you and your vision. But ultimately, it will be up to you and how well you can sell yourself.

Why You Shouldn’t Approach Banks For Your Startup Funding

Thinking about getting funding through traditional methods like the bank? Think again.

Banks have extremely strict lending criteria, and as a startup with no track record, no revenue and no proof of success – the chances they’ll say yes are very slim. As a startup entrepreneur, banks want nothing to do with you. Startups are a risk they aren’t willing to take, and with such a large customer base, banks have many other people they can lend money to at a much lower risk.

If you’re wondering how to find investors to fund your company, banks are the last place you’ll want to visit. Instead, get creative – and tap into the marketplace that other entrepreneurs can be found: Social Media.

Using Social Media and Crowdfunding To Build Your Business

One of the best ways to get funding is by using crowdfunding platforms such as GoFundMe, Kickstarter and Patreon.

“But Dan, I’m an entrepreneur! I’m not going to accept DONATIONS from other people!”

You won’t accept donations? That is precisely the kind of mentality that is holding you back. Instead of seeing it from the perspective as a donation, think of it as a business loan that you will pay back once your business is up and running. For example, let’s say you need a million dollars before you can start your business. So you set up a Kickstarter page, get the funding and now you’re ready to launch your business. How are you going to pay back your loyal supporters, who got you where you are? 

This is why some crowdfunding campaigns have rewards based on the amount that people donate. Those who donate more money, have access to exclusive perks and benefits such as lifetime discounts on products and services, or limited edition products. Having a reward tier system allows the funders to feel they are getting something in return. You get the money you need for your business, and they get rewarded for their financial assistance.

how to find investors

You Don’t Need Money – You Need Resourcefulness

Finding investors for your startup company launch requires creativity. You are doing something that goes against traditional wisdom, which means you need to think up methods that don’t use traditional means. 

The biggest problem that beginner entrepreneurs have, is that they make up excuses. They say things like “I don’t have enough money” or “I don’t know how to do this or that.” As an entrepreneur, excuses will get you nowhere. If you want to succeed, you need to realize that those who have made it, did so not because they had money, but because they were resourceful.

Imagine that you somehow got the startup capital for your company. You’re ecstatic that you finally have enough money, and celebrate with a big company launch. But then a year later, you realize you’ve already burned through all of the cash and need more. Now you’re back where you started. How will you solve the issue this time?

Having money isn’t the solution. Being resourceful is. If you have the skills and knowledge to generate money, you will never have to worry. Money is something that can be taken away from you as easily as you have earned it. And in the world of business where there are many risks and possibilities of going broke, you need more than just money if you want to succeed. 

how to find investors

Learning how to be resourceful will allow you to overcome many other problems that you will inevitably encounter along the way. If you make excuses and rely on having everything ‘ready’ before you begin, you will struggle whenever any problem pops up. Think of the problems you currently have now as opportunities, that tell you what aspects of yourself you need to improve on.

Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime. Click To Tweet

Finding Angel Investors and Getting Them to Say Yes

If you’ve ever watched Shark Tank or Dragon’s Den, you may be familiar with the term ‘angel investor’. Angel investors are entrepreneurs that are wildly successful. They are multi-millionaires and even billionaires that actively look to invest their money into funding companies and startups.

These millionaires and billionaires can afford to take the risk to invest in startups, because to them it is only a small percentage of their net worth. If the startup fails, they simply lose their investment – which is not a lot to them. They understand that if they want to make a lot of money, they must be willing to take big risks. For them, startups are the fastest way to generate more money – a small $100,000 investment could easily net them a 1000% return if the business becomes successful.

how to find investors

If you want to get funding from an angel investor, you need to be prepared. This is why I recommended you first rehears and perfect your pitch and presentation before you even begin looking for investors. Successful people know that opportunities can happen at any time, and if they want to win in business, they have to always be ready to give their best. That means preparing ahead of time what you want to say, and how you should present yourself. After all, you only get one shot at making a first impression.

Angel investors can be found in any local city, online, on television shows, at business workshops, seminars, and even as an associate of your friends or family. The larger your network is, the better chance you have of finding an angel investor. Once you do, all that’s left is to convince them that you have what it takes to make the business successful and generate them a massive return on their investment.

Why Your Network is Your Net Worth

The more people you know, the higher your chance of succeeding in business. Successful business people understand that having connections and growing their network is one of the most valuable assets they can have. In order to build something great, you need a team. And when you know a lot of people, you have access to many more opportunities.

People only do business with people they trust. And for them, they are much more likely to trust a friend than a random stranger they just met. That’s why having a large business network is so valuable, because it allows you to tap into many resources. Finding a business mentor, for example, could make all the difference for you. In fact, if it wasn’t for my mentor Alan, I might never have become successful.

Alan was my copywriting mentor. Before I met Alan, I had started and failed at 13 different businesses, getting myself into $100,000 of credit card debt. Even though I was desperate to succeed, I still did not give up, and did everything in my power to keep moving forward. That led me to attend a seminar, where coincidentally, I found myself sitting beside him in the audience.

At that time, Alan was this super successful copywriter whom I frequently studied. I managed to convince Alan to become my mentor, and after a lot of begging, stubbornness and hard labor, he finally agreed. As time went on, Alan found himself too busy to take on copywriting work from his clients, and instead handed them off to me. Because of Alan, I was able to kick off my copywriting career, find clients and never have to work a 9-5 job again. I knew the right people, and they helped to open many more opportunities for me. That’s the power of having a large business network.

how to find investors

Your network is your net worth. - Tim Sanders Click To Tweet

Expanding Your Network and Business Connections

If you want to expand your network, you have to put yourself out there. That means going to seminars, workshops, making YouTube videos or building a social media profile.

If you’ve been following my work for some time, you’ll realize that I do all of the above. This isn’t accidental, it’s intentional. I knew that if I wanted to spread my message across the world, that I would need to put myself on as many platforms as possible. I had to grow my presence online, so that people could find me and know who I am. If you’re looking for investors to fund your startup business, I would recommend you to do the same.

There are many platforms you can promote yourself on. Some popular platforms are LinkedIn, Instagram, YouTube, Facebook, Twitter and Kickstarter. Think of these platforms as your business brand – what kind of content do you want your audience to know about? What kind of content would attract investors to reach out to you for funding?

“But Dan, I HATE social media! It’s so shallow and cliche!”

Instead of thinking about it as social media, think of it as business media. You are using these popular social media platforms as a way to advertise your business. The best part, is that you can do so for FREE. Traditional methods such as running ads cost you money, and considering you are looking for investors for your startup, you probably don’t have a lot you can spend. 

Get creative, and leverage social media as your business page. You’ll be able to reach millions of people by either building your own personal brand, or finding others who are doing similar things.

Follow Me On LinkedIn and Expand Your Business Network

Becoming an entrepreneur is not easy. It means you are committing yourself down a path that goes against conventional wisdom and what you have been taught. In order to succeed as an entrepreneur, you’ll have to think outside the box.

If you’re looking for ways on how to find investors for your new company, you won’t be able to do it through traditional institutions like banks. Instead, look for places where investors and other entrepreneurs are most likely to hang out. This could be at seminars, workshops, speaking events or your local bookstore. They’ll also frequently visit crowdfunding campaigns and professional business platforms like LinkedIn to grow their network and connections.

By building a personal portfolio or brand of yourself and what you stand for, you can attract potential investors to your startup. Put yourself out there, by growing your network and posting on social media. If others are interested in what you have to offer, they’ll instead reach out to you.

If you’re looking to grow your business network and meet others who are doing the same, follow me on LinkedIn here.