Raising capital for your startup could be compared to the Dutch winter: it is dreadful and takes ages. Chances are that you cannot wait to convince potential investors of your genius concept, in order to get them to reach for their wallets. However, finding the right investor should not be underestimated. It would probably be wise not to just target the investor with the deepest pockets. Instead, you want to find somebody who can relate to your vision. Somebody who fully understands the challenges ahead and is familiar with your field of business. As corny as it may sound, the right investor will provide you with more than just dollar bills. Here is how to go about it.
Understand Your Options
First things first. That is, you need to understand your options and what type of funding is suitable for you at this point in time. Are you looking for private equity, venture capital or an angel investor? Of course everybody is eager to get that VC money. However, whether this is realistic, very much depends on the stage you are at. That is, different investors can bring about different perks. For instance, angel investors can brings loads of individual expertise but often lack the resources that VCs have. On the other hand, angel investors tend to play less hard to get with their initial requirements, whereas VCs mostly demand hard, empirical evidence that your idea is bulletproof. The lesson? If you find yourself at the early stages of running a business, chances are you will have more success with an angel investor than with a VC. Are you scaling? Then, it might be time to aim for the VCs.
Perfect Your Pitch
Don’t underestimate the power of your pitchdeck. This document could be one of the most important documents you will ever create. It is holy. Truly. A good pitchdeck should set a hook, it should make those investors hungry for more. To do that effectively, ask yourself a couple of questions. What is the problem you are solving? Who are you solving it for? Who is in your team and why are you capable of delivering what you promise? And not to be disregarded: what is the revenue model? Is that realistic and how will the revenue flow into the investors’ pockets in turn?
If you manage to bring across clearly what you envision for your company and how you will live up to it, the investors that are on the same page as you will recognize your potential.
Know Who You Are Talking To
Upon meeting with a potential investor, it is important that you understand who this person is. As such, ask questions about previous investments they have undertaken. What kind of background does this investor have? How knowledgeable and experienced is he/she? Running a little background check is probably not a bad idea before you get all excited.
Once you found an investor, it might be wise to manage some expectations. Therefore, you will probably want to assess if this person is going to fit your precious company culture. For instance, is the investor’s vision different than your company’s? Does the investor prefer a hands on or hands off approach? What role does the investor see for him or herself in the company? Those are all important questions that should be managed before you decide to join forces.
Are you currently looking for an investor that matches your business? Maybe we can help…
About Amstel Lab
Amstel Lab partners with startups and scaleups to commercialize your business. On the back of our experience, we have developed the unique Amstel Lab method: a tailor-made approach to maximize success. We test your markets, refine your product, innovate your commercial approach and execute your strategies. Any good idea is worth seeing through.
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