How to attract investors

How to Attract Investors When Creating Your Business

So, you’ve got a brilliant business idea, and now you need money to get it off the ground. This is where business investors come in handy. Investors are an invaluable resource for entrepreneurs, providing essential financial support for their projects. However, convincing them to come on board with an endeavor can be a considerable challenge.

Here, you’ll find 12 helpful tips for attracting and engaging the investment your new business needs.

1. Work on extending your network.

Many entrepreneurs dread the hard sell of approaching an investor. Understandably, they find the process intimidating. One way to avoid this kind of interaction is to cultivate a network rich in potential investors.

If you have a pre-existing relationship with potential investors, the dynamic may be different when you approach them. You may even find that interested parties approach you regarding your business ideas.

Remember, investors aren’t just investing in your business; they’re also investing in you. That’s why it pays to have heightened visibility and a positive reputation in relevant circles.

2. Show evidence.

When it comes to large sums of money, investors don’t usually gamble on a hunch. Instead, they want hard data that convinces them of your project’s potential. Unfortunately, this can be difficult to obtain at an early stage: after all, you haven’t received an investment for the work yet!

However, it’s not impossible. For example, the results of a successful small-scale pilot or some focused market research findings demonstrating strong interest could be enough to convince an investor.

4. Personalize your pitch.

If you can, research potential investors prior to approaching them. That way, you’ll be able to save time and work smart by focusing on those who are most likely to be interested in your investment opportunity.

Maybe they already have a portfolio of investments. If so, you should look at the projects that have successfully attracted them and try to find common themes. Ultimately, you want to understand a potential investor’s priorities so that you can tailor your pitch to their tastes.

To attract investors, find the right angle to sell your project directly to them. For example, an investor who consistently funds environmental projects will undoubtedly want to hear about your business’s sustainability measures.

6. Choose co-founders wisely.

Do you have a co-founder? If not, you might want to find one fast. They are a great way to complement your skills and background with anything you might be missing.

For instance, maybe you’re the brains behind an incredible new technology, but you don’t have any business acumen. A co-founder with a background in business will make your project even more attractive to investors. If you’re extremely resistant to the prospect of pitching, you might choose a co-founder that can be a confident spokesperson.

7. Refine your business first.

Before you start selling your company to others, make sure it’s in the best shape possible. One way to do so is to participate in a startup accelerator. A reputable accelerator brings many benefits: you can meet mentors, expand your network, and iron out any difficulties you’ve been experiencing while working on your idea.

Some accelerators have an excellent reputation, which means graduating from those particular programs could impress and attract future investors!

8. Build a strong brand online.

Investors are guaranteed to research your business before they commit to investing in it, so make sure what they find online is positive. If you can build up a community of supporters before you start pitching, that’s proof of interest in your project.

An amateurish web presence won’t inspire faith in your abilities. Your site and social media accounts should be updated and professional to ensure positive first impressions.

9. Think outside the box when it comes to investors.

When you think about business investors, you shouldn’t necessarily visualize rich people in expensive suits. These days, alternative forms of funding are available. Maybe your project lends itself to group funding, for example. There are online platforms designed to facilitate this by matching interested parties with investment opportunities.

Pitching on these platforms is a different experience from the traditional investor pitch. For inspiration on your approach, research other projects on your chosen platform that successfully attracted funding and see how they achieved their goals.

10. Don’t overload potential investors with information.

When you’re trying to convince a would-be backer, it can be tempting to provide every fact and figure available about your project. However, important details that could seal the deal may be lost when you prioritize quantity over relevance.

Rather than flooding investors with information, make the process as easy as possible for them. Provide relevant details in a concise, accessible format. If you overcomplicate matters, you’ll probably struggle to keep their attention.

11. Emphasize your originality.

Investors have likely seen many pitches, which means they’re probably bored of the same-old, same-old. Of course, you shouldn’t build your pitch around cheap gimmicks, but you should lean into what makes your project unique, embracing and emphasizing your originality.

Explain specifically what makes your idea different from others: how will your business conquer its competitors? What does it do that no other business in your sector does? The ultimate goal is to generate excitement. Potential business investors should feel inspired to be part of your project.

12. Spend time on a polished presentation.

A pitch with a potential investor is definitely not the time to wing it. Not only do you risk losing the investment, but you could also damage your reputation, which can have long-term implications for your business.

To avoid this, prepare for your pitch and practice your presentation thoroughly. Ideally, you should practice it in front of a knowledgeable audience that can provide constructive feedback.

Demonstrate that you’re a professional and that you believe the investor’s time is valuable. This will make them much more confident about going into business with you.

Once you’ve absorbed this advice and put it into action, you’ll be more than equipped to start approaching backers. However, don’t be dismayed if you’re not immediately successful. Persistence is key, and with time and hard work, you’re bound to find the perfect investor for your project.

How to Attract Investors for a Startup

It’s easy to get caught up in the excitement of starting a new business and not realize how much it really costs to get things up and running well. Most entrepreneurs find that it costs more money and more time than they anticipated. In addition to giving a new business adequate time and resources, there are many benefits to developing a well-thought-out business plan. Good planning reduces your time, effort, spending and energy. Even the best-laid plans may require more funding than you’ve been able to raise on your own. That’s the time when it may be wise to seek investors to finance your operations or marketing plans. In exchange for financial help, investors want assurance that you’re investing your time and money wisely and intentionally.

Those who are successful in attracting sound investors know how to get and keep their attention, and they keep at it until they’re successful.

Ways to Attract Investors

There’s no specific formula for attracting investors to your product or service. However, past entrepreneurs are usually willing to share some tips that helped them get financing. The important thing is to start moving in the direction of seeking investors and learn from your attempts and mistakes. Here are some strategies that anyone can try:

Create a Realistic Budget

Before investors will take a chance on your business, they’ll want some assurance that you’ve had a good track record selling your products or services on your own, and that you can successfully run a business.

Keep careful accounting records of the costs of raw materials, equipment, labor and operating costs so that you can estimate revenue projections with some degree of accuracy. Having good records shows that you can back up what you say with hard numbers, and that you’re serious about the business end of the business. You’ll also need to share your current and anticipated future expenses to demonstrate your profitability margin. Records will also show you where you have room to add more funds for marketing purposes.

Savvy investors know that if you’ve already had some success with customers, many more customers are waiting to buy. Early sales will prove to investors that your products or services are priced competitively. They’ll be ready to hear about your successes and milestones. Be ready to share stories of marketing success and your future plans for growth.

BoardEffect provides an electronic platform where boards can store budget-related documents and marketing efforts and record investor pitches in the security of the cloud. This program helps board directors track and manage their investment strategies through an annual cycle.

Soft-sell marketing is a less formal way of seeking investors. Everyone knows people, so it’s something anyone can do whether they secure investors through other channels or not. The idea is simply to mention your new business at social gatherings everywhere you go and let investment opportunities occur organically.

Ask friends for advice. They may not have any to offer, but they probably know someone who does. Soft-sell networking will attract investors who have the same interests as you, and you can’t know who may be interested in your business until you tell them about it.

Get to Know Potential Investors

When you connect with investors, they’ll be researching you and you should research them as well. Find out whether they’ve invested in products or services similar to yours in the past. Perhaps their business philosophy matches closely with yours. Whenever possible, take time to get to know them personally and professionally. You’ll have better luck working with investors whose interests mirror your own.

Don’t be shy about asking investors to be co-founders. Additional perspectives and expertise can be a beneficial asset, especially when your new co-founder has valuable knowledge and connections.

Follow Investors on Social Media

Like many people, investors tend to have well-rounded profiles on their social media channels. Find them. Friend them. Follow them.

Look for topics and themes they use frequently on their blogs and in their videos. Get connected with them and let them know that you’re an avid follower. Many times, they offer workshops and seminars or appear at conventions as keynote speakers. Take advantage of opportunities to meet them in person and get a conversation going. Personal contact just might make the difference in getting a private appointment where you can make your pitch.

Is Your Pitch Investor-Ready?

Believe it or not, most CEOs dedicate at least six months to pitching to investors. This part of the process will probably increase your budget if you haven’t planned well for it. Expect to have additional costs for travel, food, fees, and quantities of your product and marketing materials.

Don’t make the mistake of pitching well above or below your level. Small startups should be looking for smaller, lesser-known investors that have a reputation for investing in similar products or services as yours.

Businesses that are larger and that have a fair amount of established cash flow should seek out bigger investors that can offer larger amounts of capital.

Getting the right-sized investor will prevent you from wasting your time and theirs.

Practice Your Pitch

Practice your pitch to perfection. Learn how to tell as much about your business as you can in the space of a short elevator ride. Your short pitch should include a quick overview of your product or services. Your longer pitch should be well organized and encompass a description of your product or services and why customers are eager to get it. Help them understand where you are now, what their capital will help you to do and, most importantly, how they can expect to get their return on investment.

Be sure to share with investors who your target customers are. Consider presenting them with a spreadsheet that shows how long your customers have been loyal to you and how much they’ve generated in sales from each customer. If you can, try to secure some testimonials from satisfied customers who describe their experience and satisfaction with your product or service.

Practice your short pitch on everyone you can find and fine-tune your long-pitch for the most viable investors.

Perhaps the most difficult part of attracting investors is learning to graciously accept a “No, thank you” or “Sorry, but your product/services isn’t right for us at this time,” and then go into your next appointment with an investor with full confidence. It can help to accept that you’re apt to get more declines than acceptances during your investment-seeking phase. Learn from the investors’ advice and suggestions, and don’t give up.

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How to Attract Investors with Online Meetings? (and Convince 90% to Buy Shares)

Thinking of fundraising as a way to drum up your business? Looking for a solution to attract investors to your startup? Then it’s time to get inspired! Take a closer look at how Studio Panika used online meetings to drive people to invest money in an impressive movie production studio. [SPOILER ALERT: They managed to convince 90% of their meetings’ attendees to become shareholders.]

Although pitching angel investors has become a way of the samurai for entrepreneurs worldwide, it’s not something you can take for granted.

As you know, it all starts with an outstanding product. But since you own one, you need to build a social media community around it and create a communication strategy to reach out to potential investors. Especially if you don’t want to limit yourself to meet venture capitalists in person.

Studio Filmowe Panika had an appetite for raising capital from people scattered all over the country.

Watch our video case study to see how they achieved this goal with online business meetings:

Table of Contents

The customer:

Studio Filmowe Panika is the largest, independent movie production studio located on the Polish coast. With an impressive, 300 m 2 soundstage, top video hardware and postproduction software as well as professional dressing rooms, they are fully equipped to produce high-quality video materials for:

Studio Panika’s reason for using the ClickMeeting webinar platform:

Maximizing the effects of their fundraising campaign;

Spreading their business idea through online business meetings;

Running series of video conferencing events to showcase their studio’s premises to potential investors.

The benefits:

Reaching venture capital players scattered all over the country;

Being able to run online business meetings on the move;

Convincing around 90% of meetings’ attendees to invest money in Studio Filmowe Panika.

How to attract investors?

Studio Panika’s fundraising campaign caught our attention on social media. We already knew the quality of this video production company and the unique character of their premises.

Hence, we quickly recognized their idea to raise money from selling the shares as an excellent solution for accelerating their business.

But to make the idea come true, they needed to implement some online tools in their game plan. We couldn’t be happier when we discovered that Studio Panika employed online meetings in the process.

And when it turned out that ClickMeeting is their software of choice, to help them accomplish their fundraising goal, it was an early Christmas for us!

From a movie passion to a joint-stock company

From the moment we set our feet in Studio Panika, we understood where the fundraising success came from. We could see with our own eyes what have attracted over nine hundred people to invest money in this company.

Apart from the spacious soundstage where all the video shootings, events, and concerts take place, Studio Panika wows with its interiors.

If you were a movie freak, you would be hyperventilating there because of the excitement. Cinematic posters and large movie captions are staring at you from every wall.

But it only gets better – Han Solo in carbonite in 3D, a shark’s head from iconic Jaws movie, or an E.T. figure standing in the hallway! This place is a paradise for Hollywood addicts!

The overall impression comes down to a professional movie company with an impressive studio where every tiny detail makes sense.

After a few years on the market, their CEO, Oskar Kaszyński, decided to take his venture to a higher level:

Recently a large milestone happened in my company. I have transformed into a joint-stock company and started to sell our shares.

How to Attract Investors

Getting the Mo is how to attract investors. And more importantly, customers and partners…

It’s that little curve that takes an Entrepreneur or start-up from eating noodles, to eating steak. This is what investors call: the Mo. It stands for momentum. Say it with me…momentum, because it’s the most beautiful word an investor wants to hear. When they hear it, their ears perk up. It’s that nudge right before the hockey stick takes off.

So how do you get the mo that will attract investors and partners? Well, here are 10 ways:

1. Ignore Rules

Ignore rules, because businesses and innovation aren’t created by people who follow the rules. Use caution here though…there is a fine line between ignoring or bending the rules, & just being a downright asshole (see #6). Do your own thing, but be prepared to deal with the consequences at the end of the day. You can use rules as a guideline.

2. Build Relationships

3. You Are Being Watched

This one took me a while to figure out, until I started to dig into the analytics of my sites and LinkedIn account. Then I realized something: investors are watching every move you make. They may not be talking to you, but they are watching you. And not just investors…CEOs, potential partners, large corporations. They all watch these startups and new Entrepreneurs come into the game. So remember, you need to put yourself out there; and you’ll see them start coming out everywhere.

4. Press Releases

Good press releases are your best friend when the question arises on how to attract investors. Investors search press releases for up and coming Entrepreneurs & start-up almost daily. Why? Press releases are mo…and come along with increased exposure (marketing) and possible clients.

5. Tell a Good Story

A good story is important. It’s the essence of what will attract investors & the media. And it has to be emotional…no one wants to hear a logical story. A common misconception about investors is they only care about the terms…that may be true in some cases…and terms certainly are a factor; but that not what attracts investors. That’s simply the negotiating that takes place afterwards. Many angel investors are really emotional tickers. Having a good story is what draws them in.

6. Authentic Leadership

Authentic leadership is like Princess Diana vs Lady Gaga. Who would you want to work for? Which would you invest in? I can tell you Princess Diana is still being honored long after her death; Lady Gaga on the other hand…nothing but a fad that will eventually run itself into the ground. Good leadership is authentic, humble, helpful…yet unruly and innovative. Can you be both? Oh yes, and that is ideal when it comes to attracting investors.

7. Just Be Awesome

Worry about who you are, the founder IS the company. It should reflect you…just like your personality. This is what makes you awesome! Makes you unique. This also sets the tone for culture and values, the key roles of a CEO.

8. Get a Rockstar Supporter

Celebrities have been known to endorse products when they get them free, which carries a lot of weight. You don’t need Britney Spears (and probably don’t want her anyway 😉 ) but do find someone your target market identifies with, not someone your investors identify with. Getting someone your investors are attracted to…doesn’t really attract them. It’s not them you need to satisfy, it’s your customers.

9. Your Customers Showing You Love

Your customers showing you love is much more important than any investors showing you love. Investors will show you love when your customers show you love first. Why? Because it proves your business model works. it proves you can survive.

10. Hunt Down the Media

In my opinion, it’s easier to hunt down the media and chase them…than it is to hunt & chase investors. The media doesn’t require a 50 page business plan, just a damn good story and product. Then you get customers, now you’re in power seat with investors. And guess what? You may find that you don’t need all those attracted investors.

3 Expert Strategies for Attracting Investors

Three field experts offer their best advice on how to attract and entice investors to provide funding for new and growing businesses.

By: Erik J. Martin, Contributor

It takes consistent capital to keep a small business afloat. Around 29% of entrepreneurs go out of business because they run out of cash — the second most common reason behind small business failure. Additionally, more than one in four businesses surveyed by the National Small Business Administration admitted that they’re not able to get the funding they needed.

Finding investors willing to infuse cash in your company in exchange for equity or a debt repayment with interest can be a smart way to subsidize your enterprise. But enticing the right lenders, venture capitalists, angel investors or other funding source can be tricky. Here, three experts offer their best advice on attracting business investors.

Drum up positive publicity

One surefire way to lure investors is to grab the media spotlight. Garner favorable PR coverage in online, broadcast and/or print channels by starting small and working your way up.

“The way to do this successfully is by pitching story ideas to media in your town, like the local TV station or community newspaper, and then pitching your way up to larger news organizations,” recommended Stacy Caprio, founder of Accelerated Growth Marketing. “Once one outlet starts taking an interest, there’s always the chance that the ‘PR snowball effect’ occurs and other media start taking a closer look at you, too.”

Caprio said local TV and radio news stations commonly seek out area success stories.

“Transformational stories that detail how, for example, you built your business from nothing up to a major player in your market or that offers goods or services that stand out from the competition make for good pitches. So do stories about your organization [getting] involved in a feel-good endeavor for a charity or worthy cause.”

Once you’ve gathered a few clips and media mentions, post them on your website and social media channels and include them in your presentations to investors.

In the end, no one knows your small business better than you. So stand firm in what you believe is best for the company when you want to meet with and attract investors.

Collin Holmes, founder and CEO of Chatmeter

Craft a winning presentation

Want to impress prospective investors? Focus on the figures and forecasts they care about, said Brian Medley, founder and principal of VertexCFO.

“Build out a comprehensive investor presentation centered around your business plan and an in-depth financial forecast that looks ahead three to five years,” he said. “Be sure to document the company history and prepare bios of your leadership and founders. Also include details on the products, services and qualities that make your company unique or different; market size and growth potential; your marketing and sales plan; a thorough analysis of your competition; and details on how the business is going to be capitalized and funded.”

Meticulous attention to detail and precise numbers (or close estimates) are crucial ingredients needed. Your presentation should also cover:

Always remember, Medley added: “Investors will be reluctant to participate until you can demonstrate credibility and a strategic path for growth. A well-planned presentation can make all the difference.”

Demonstrate strong leadership

“In the end, no one knows your small business better than you. So stand firm in what you believe is best for the company when you want to meet with and attract investors,” suggested Collin Holmes, founder and CEO of Chatmeter.

Holmes noted that the key to showing solid leadership is first to provide examples of how you’ve taken calculated, smart risks and made sound decisions as an entrepreneur and then own the responsibility that follows.

“Be honest about lessons you learned and opportunities you capitalized on as you grew your business, found your best go-to-market strategy, and pivoted to address any sticking points or challenges,” he said.

Additionally, “prove that you can take advice while remaining an advocate for the true purpose, voice, and direction of your company. That means being an attentive listener and willing to acknowledge and follow an investor’s strategic business advice.”

Few things validate effective command of a company better than the talent you’ve chosen to surround yourself with.

“Introduce key members of your trusted team to the investor. Consider allowing employees to act as advisors in your meetings with the potential funding source,” said Holmes.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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