As India's startup ecosystem grows, individuals and strategic investors are getting involved in business investment opportunities. For entrepreneurs with little understanding of how to find and pitch investors for business growth capital, finding the right company investors can be challenging.
In this quick article, we will be discussing how to successfully grow your company by taking the necessary steps to contact business investors. We understand how daunting it can be to start this process, but we are here to provide insight and advice. We'll be helping you develop a strategy to ease the process and explain the common pitfalls and mistakes to avoid when contacting investors. With our guidance, you will be able to determine the best approach for your business to raise funds and ultimately achieve success. We will also discuss the importance of preparing an effective pitch deck, how to research potential investors, and best practices for building relationships. By the end of this article, you will have all the knowledge and resources needed to confidently contact investors and increase your chances of securing the funding you need to grow your business.
What to consider before approaching investors
• Understand your company’s financial situation
• Research potential investors and decide which ones are the best fit
• Come up with a pitch and presentation that best showcases your business
• Set up meetings with investors and prepare a detailed list of questions
• Know your company’s financial needs and make sure they’re clearly outlined in the pitch
• Take notes during meetings and follow up promptly after to maintain relationships
• Negotiate terms and set up a repayment.
How to find company investors - 8 proven ways
1. Research potential investors:
Identify national and local investors who specialize in your industry sector, research their portfolio and past investments, and look for investors who may be interested in your business.
2. Reach out to your network:
Reach out to trusted contacts in the venture capital and investment community, such as angel investors, venture capitalists and private equity firms.
3. Use online resources:
Online resources such as IndiaBizForSale, AngelList, Gust and Crunchbase have databases of potential investors that can help you identify the right individual or firm for your business.
4. Contact venture capital firms:
Reach out to venture capital firms and pitch your business, outlining what your company does, the market opportunity, the stage of development and your financing needs.
5. Apply to accelerator programs:
Participate in accelerator programs such as Y Combinator, which can provide access to capital and advice from experienced entrepreneurs.
6. Attend networking events:
Networking with industry professionals and attending events such as conferences and pitch competitions can lead to useful contacts that may help you access capital.
7. Consider crowdfunding:
Crowdfunding has become an increasingly popular way to fund a business, allowing you to tap into a large network of potential investors. Research potential crowdfunding platforms, such as Kickstarter and IndieGoGo, to see if it is a good fit for your business.
8. Prepare a business plan:
Before contacting potential investors, put together a comprehensive business plan that outlines your company.
What information to collect about potential investors
• Investors' preferences,
• Investment history,
• Investment strategy/criteria
• Investment track record - Past & Current investments,
• Financial resources,
• Financial goals/returns
• Current portfolio - Professional background/experience
• Success stories.
Conclusion
In conclusion, connecting with company investors is an important step in growing your company. While there is no single approach to contacting investors, following the tips outlined in this guide can help you to build a solid foundation of understanding and create the best possible opportunity for success. Taking the time to research and prepare can make a big difference in the success of your investment efforts. With the right approach, you can create a strong connection with potential investors and increase the chances of receiving the funding you need to grow your business.
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A private body to provide funding for a start-up venture or budding business to overcome their financial needs and financial shortages for their operations,i.e, a funding body for budding/developing firms is known as VENTURE CAPITALIST.Budding startups with latest and innovative ideas are being assisted by Venture Capitalists at their initial stages in exchange of equity & possession stake.Sprouting startups with risky operations are the eligible ones for this seed funding.Who all are Venture capitalists : rich depositors, investment banks and any other monetary organisations.Why are Venture capitalists needed?The capitalist providing money will in return acquire an equity position.This equity financing mainly happens where the business is not established and which can’t access business loans from financial bodies due to shortage of cash incomes,deficit of security e.t.cThe Controlling Authority:The Venture capitalists will have an active participation in the business operations and thus a controlling power in such firms.In case of selling of shares or any such cases due to the well organised investment structure,the Venture Investors are eligible for rewards.There will be an individual who will be the board member and take part in all the key decision making and administrational & managerial operations and even funding & financing.Usually the managerial layout will be as a partnership firm,where each individual will have the responsibility and authority according to the equity share and receive the profit according to the equity share.Do you need VENTURE CAPITALIST assistance?Let's check the documents.Details of unsecured loan,if any raised by the company.Moa, Aoa,Incorporation Certificate.Letter proving no past Venture Capitals have been utilised.Investor rights agreement,Voting agreement e.t.c.
Prior Bank’s Inspection Report.Updated Term Loan account statements & Cash Credit account statements.Bank’s acknowledgement assuring that they will not absolve any primary or collateral security without the venture capitalist acknowledgement.How to APPLY?To register and request for a venture funding the primary procedures are: Idea Generation & proposal preparation of the Business: The initial step is to submit your idea with a well prepared proposal including:Executive Business SummaryRequirements for the management of the company.The financial and investment calculations.Current and future situations.The market trends and scenarios and value of the idea in the market.Detailed analysis & decision making whether to provide funding, or not.
Initial Meeting: After proposal submission, if the Investor is interested in the project and is ready to fund,then they conduct an initial meeting to discuss the project in detail.After this meeting the final decision to proceed or not will be made.
Deep Research-Due Diligence Varying from business categories and business natures, due diligence fluctuates.The procedure is done after a series of client communications,operational questionnaire and analysis of goods & services methodologies.
Terms and conditions-Funding If the due diligence is satisfactory then, the investor submits a letter “ term sheet” mentioning the terms and conditions of the investment.These should be acceptable and approved by both the parties,and after the legal procedures and due diligence the fund will be released.
How do you raise funds for your startup business?Investors look for many things before funding a brand new venture.
How strong the business model, expansion, and expenditure plans are and how investors will receive their return matter the most to attract funds.Many things are intimidating young entrepreneurs in raising finance for their startups.
We have explained the 5 most common funding trials in the below post to help entrepreneurs find adequate funding for their new venture.
