As an entrepreneur, you understand that getting investors interested in your startup is more stressful than waiting for test results. You’re wondering whether you’ll be able to wow them and get the funding you need for your business.
Well, we would like to ease some of that worry for you by discussing 10 fundraising tips for startup founders to attract global investors. These tips will help you attract investors for startups, build a credible image, and secure funds. So, if you want to make a winning pitch, read till the end!
10 Tips for Entrepreneurs to attract Investors
A winning pitch is not just about your startup; a few more things contribute to the startup’s success, and that’s what investors look for the most. If you are wondering how to attract investors for funding, the points mentioned below will help you.
1. Understand the nitty-gritty of your market
A startup works in a market and brings innovation. To succeed, knowing the target market helps you identify the market trends, potential customer bases, and competitors. All of these factors contribute to the success of startups and attracting investors. Before investing, the investor wants to know what you are dealing with and your plan to tackle any challenges and setbacks.
2. Build a realistic business model
A business model explains the structure and strategies of the startup, how it will generate revenue, and scale the operation to capture a larger market. It helps the investors decide if your startup survives in the real world. When you are high on motivation and adrenaline, creating a business model that’ll make you a unicorn startup in mere months is easier.
However, if you sit down and understand your market and competition, the structure of a business plan is bound to be complicated. Thus, the business model should highlight well-researched projections for demand trends and realistic strategies to target your audience and boost sales and profits for the startup.
3. Hire credible and skilled staff
Becoming an ‘I’ll do it all’ type of CEO is ambitious. But is it practical? We have yet to see such a success story. So, instead of being average in all the areas (production, finances, marketing, and management), be excellent at what you do and work with credible employees and reliable partners. The investors often focus on your vision and your selected team to convert it into a thriving reality. So, choose your team wisely and highlight them in your pitch.
4. Draft a clear and detailed value proposition
A startup solves a problem that has existed for a long time with a unique product or service. What you offer to the target audience to solve their issue is your value proposition. Many startups fail to outline what they are offering and, most importantly, how it will help their target audience. If you are wondering how to get startup funding, focus on your value proposition. Be clear, honest, and concise.
5. Develop an MVP for market traction
One of the most essential tips for startup founders to attract investors is gaining market traction. But what is market traction for startups? It is determining whether your intended audience accepts your goods or service. The market traction is one of the most important factors when attracting investors for startup funding. A good market traction is more likely to get you the desired financing.
Therefore, a startup should create a minimum-value product (basic prototype of your offering) to test it on your target market and note down their response. It also helps you enhance your offerings.
6. Create a perfect pitch deck
A pitch deck is a presentation showcasing the preview of your startup. It is one of the most vital parts that startup founders should focus on. It should be compelling, clear, and visually appealing. A solid pitch deck includes sections on your problem statement, solution, market size, business model, revenue projections, competition, and team. Keep the presentation simple, concise, and data-focused, and avoid adding fluff and buff content.
7. Practice your pitch!
Your confidence and pitch delivery can help you attract investors and gain their trust. Your pitch and how you answer their queries give them an insight into your knowledge and skills. So, practice the pitch like your life depends on it. Practice your pitch until you can present it naturally, confidently, and concisely. Also be prepared for any questions the investors may have, including questions on your business model, projections, or competition.
8. Provide realistic valuation
Valuation is the market value of your startup based on your startup stage, market demand, and credibility. Most investors trust the startups to offer a realistic valuation. The valuation also reflects your understanding of the market and your startup’s growth potential. That’s why startup founders should research and consult experts to provide an optimum valuation. It is crucial because overvaluation can lead to investors backing out, and undervaluation can slow down startup growth.
9. Diversify your network in the startup ecosystem
If you are wondering how to approach investors, there are better ideas than going directly to their offices. Instead, you can start with networking to build business or reliable relationships with them. Attending networking events like the Global Startup Summit by 21By72 can help you connect with global investors. Thus, you can get a pitching opportunity through your network. Referrals from your network give you a competitive edge. Therefore, diversified networking should be a top priority for startup founders to attract investors.
10. Thoroughly prepare for due diligence
Pitching is not the end of your duties in attracting investors. The startup needs to go through thorough due diligence to negotiate the startup funding further. Due diligence is like a backup check for the startup. Investors examine legal and corporate paperwork, financial disclosures, customer agreements, intellectual property records, and so on to determine whether you are legitimate or not.
Conclusion
Attracting investors is about more than just having a compelling idea. It’s about showcasing a well-researched plan, a competent team, and profitability. For this, the startup must be aware of its market target audience and create an effective business model to manage its operations, target the audience, and boost sales. Focus on building a pitch highlighting your team, business model, market traction, and value proposition. One of the most critical startup fundraising tips is to give a thorough research valuation to get the best funding without scaring away the investors. Leverage networking events like Global Startup Summit by 21BY72 to practice your pitch, secure funds, exhibit your
startup, and network with potential investors and other industry folks.
FAQs
1. How do we attract investors for startups?
To attract investors, founders should focus on understanding their market, building a realistic business model, assembling a skilled team, creating a compelling value proposition, and demonstrating market traction.
2. How do you get startup funding from global investors?
To secure funding from global investors, startup founders should pitch their scalability, present a clear revenue growth strategy, and showcase knowledge of both local and international markets. Joining global accelerator programs, attending international pitch events like the Global Startup Summit, and networking on platforms like LinkedIn and angel investor networks like 21By72 can help connect with global investors.
3. What are the factors influencing investors’ decisions for startup funding?
Investors typically consider the team’s expertise, the sustainable business model, market size, competitive advantage, and any traction or milestones the startup has achieved. A realistic valuation is crucial in attracting investment.
