how to get funding

Each day venture capitalists and investors receive over hundreds of cold emails and meeting requests from start-up founders and small time entrepreneurs. It is difficult for VCs to process and select the start-up they want to fund that way. Instead, an entrepreneur should build a strong case first by getting to know someone from the company and then approaching the VC in their area of interest.

In the following ways, you can look out to attract more VCs for funding:

1. Innovative solution to a problem

Focusing on the problem and devising a solution is the key to getting more investors for your venture. In this era of cut-throat competition, simply coming up with a new idea isn’t sufficient. The idea needs to be worked on and presented in a complete manner with business suggestions, marketing tactics and target group mentioned in a well-compiled presentation. VCs will choose the most differentiated and rounded appeal which they find will enhance their chances of making profits as well. A revamped version of a done and dusted idea will instantly be rejected by the VC.

For instance, OYO rooms was a completely different and innovative idea which is why they have huge investors like GreenOaks, Sequoia Capital etc.

2. Assumptions must be challenged on a continuous basis

Start-ups often stick to the original plan they have devised which is why they don’t grow with time. However, the basic thesis must be challenged from time to time as the markets are dynamic and constantly evolving. Assumptions must be proven or eliminated through basic research methods for a more rounded understanding of the business.
Once you are clear with all the factors related to your business, pitching to a VC becomes easier for you and the VC is also clear about what he investing in.

3. Think beyond the horizon and act

If you have a unique insight and are able to present it well in front of the VC, chances are that he will invest in your business. VCs don’t want to invest in an area beyond their zone or one that they think is not feasible. A VC doesn’t want to invest in an idea which is not innovative either. Hence, one needs to have a clear vision and come up with unconventional methods of making it work in the future. Strategic investors are more likely to invest in ventures that have an articulated vision of what they want to become in the future.

Related Post: How to raise money for your startup?

4. Build a strong team of dedicated individuals

Founders need to encourage significant contributions to the start-up from people from different backgrounds. You must have a mission that is big enough to source human resource for different fields. Finding an entrepreneurial crew that wishes to guide their wider team as well as customers, markets and investors to a better future with conviction and humility is a time-taking but rewarding process.

A VC’s research will tell him about your dedicated team and your strong leadership which will definitely be a huge contributory factor for him to invest because strong leadership skills and a set vision are the keys to a success.

If you follow these rules, you will definitely find a great VC to invest in your company. We wish you all the best on finding a VC and on your start-up.

Image Credit: americaschoicecredit.com

Pitching to investors in a correct manner is an essential for every start-up because that is where the major funding comes from. There is an extensive list of do’s and don’ts to follow while pitching to an investor. One needs to identify the market segment to enter, the kind of target audience they’ll be approaching, the problems the business is likely to face and key revenue streams. However, along with a basic business plan, a start-up also needs to make sure that they are able to convey the passion and confidence in them to the Venture capitalist. These qualities help an entrepreneur to strike a chord with the VC at a higher level.

Personalised data leaves an impression on the VC

Every start-up is ready with a pitch and a plan which consists of statics, market conditions, income channels etc. However, if you want to win the deal, you need to go out and do something different. Try and personalise the data for a particular VC you want. For that create personalised statistics for them such as how much the investor should invest and why? Also, include what they’re getting out of this investment.

This will help you in striking a personal chord with the investors who will be more likely to invest in your company. They’ll believe that since you’ve gone that extra mile to impress them, they are bound to get some benefits out of you. More than just benefits, it’s all about making the VC feel special.

Build narratives around your product

The data provided by every start-up is almost similar in terms of the business plan. As a budding entrepreneur who needs the funding, what you can do is narrate a real life story.
For instance, if your product is sanitary napkins, you can build a character and a story about a woman who is very career-oriented. Despite that, once a month she has to take a break from work for two days since she needs to deal with the heavy flow and hates using tampons. Hence, your sanitary napkin shields her on such days and provides her with comfort and continuity at work.
If there’s a woman in your investing team, she is more likely to relate to the story better than a normal pitch. If your story manages to strike a chord, you are more likely to get a deal.

Try and balance the genders

According to a study by Babson College, 34 per cent of firms with a woman partner are more than three times as likely to invest in companies with women CEOs, compared to just 13 percent without a woman partner.
Women are catching up on the entrepreneurship front and they deserve some recognition. If you’re a start-up with a team, try and get more women in your team as it not only balances out genders but her presence also acts as a great boost to your team.

Continuing with the example of the sanitary napkins, since it is a product developed for women, VCs are more likely to believe in your product if you have a woman who actually approves it.

Image credit: articles.bplans.com

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4 Ways to gain attention from VCs