The hardest part about how to find investors for your startup is literally talking to them. With investors receiving pitches from about 20 different entrepreneurs everyday, it’s likely they won’t have enough time to listen to yours.
Even if they do, weeding the best out from the rest can be tricky. It shouldn’t come as a surprise if you need to reach out to over 40 investors before receiving your first round of funding. To your benefit,
Here is a checklist for stepping into the shark tank and how to find investors in India.
But before you do, here’s what you need to do to prepare to talk to an investor.
1) Have a business plan
Having a business plan is the most crucial thing before you pitch to investors in India for startups. Ensure that your business plan includes important details such as what your startup is about, sales forecast for the next few years, and the target audience for your product. To support your sales forecast, it’s also useful to have industry reports to show how your idea is unique enough to fulfill what the industry lacks.
Remember, your business plans needs to look professional. Although there are many templates available online, make sure you customize them to your personal preferences. Handwritten notes are a big NO. Instead, have them typed out in a binder/folder in a presentable manner. Check that everything you would need is easily readable and accessible during the presentation. This is not a college presentation. So you need to know the business plan at the tip of your fingers to be able to easily answer any questions thrown your way during the pitch.
2) Have an online presence
AngelList is an extremely famous portal for startups to list themselves and learn about investors. Get yourself listed to make it easy for investors to find you too. Include accurate and specific information about your company, team, and product in your profile.
Share your profile with your colleagues, acquaintances, and request your friends to share your profile too. Once people follow you, people who know them will see it too, arousing their interest leading to them visiting your profile. Not only AngelList, create a company profile on LinkedIn and Crunchbase too. Whenever investors follow you/your company profile, make sure you send them a message to add a personal touch. This is your chance to initiate a conversation, eventually leading to meetings. One of these meetings will end up being fruitful. AngelList, Crunchbase, LinkedIn are just three of the places to help with how to find investors and where you can make your presence felt and reach out to investors.
A great example of using your online presence to its full potential is watching out for investors who chose to follow companies similar to yours. Reach out to them to make them aware about your startup as well.
3) Pitch to your friends and family
Before you go around pitching to investors, begin with your friends and family. To keep your relation professional, pitch them your business plan solely as an entrepreneur, not as family or a friend. From details like your outfit to your way of talking to your actual presentation, ensure everything is strictly professional. Set the mood with only business in mind and put that point across firmly, so other personal topics don’t pop up. They may be afraid and unsure about merging personal and professional relationships. Treat them as your legitimate investors in India for startups. Put forward points as to how this investment will favor them and give them real benefits like returns with interest and stock options.
Figure out how you plan on paying them back. If you have a product, you could offer them a free supply. If you have a sample ready, show them. Let them try it out for themselves. If you’re offering a service, maybe car rental, give them free access to it.
In case you wish to propose for investment but accept it as a gift, ensure you’ve made this point very, very clear. Send them a letter of acknowledgement and thanks stating that you’ve accepted the money as a gift. Think about it, if you gave some money to Ambani at some point for business funding, wouldn’t you want your returns now? They could feel the same.
4) Strategize a list of investors to meet
Create a list of investors who have invested in similar startups and would be interested in yours. Select around 50 investors you’d like to pitch to, to begin with. Go through lists on AngelList and conduct research on other websites about recent fundings. At this point, it’s always great to be in touch with other entrepreneurs with experience. They can help you out with how to find investors in India and your list of investors and give their suggestions to help you identify investors who would possibly be interested in your startup.
To help you jot down a few investors, here’s a list of the 50+ Top Venture Capital Firms in India.
5) Plan your introduction - using networks or not
You’re more likely to get a good outcome using mutual contacts. Once you have your list ready, check for any connections you have that could introduce you to investors in your list. Prior to asking your common connection for an introduction, give them a reason to do so! Show them how awe-inspiring your startup idea is to convince them. Once your connection has introduced you to an investor, be prepared to answer intro emails confidently.
If you don’t have any common connections that can tell you how to get investors, use your ingenuity. Draft your own introduction mail meticulously so it doesn’t sound like a mass mailer you’ve run for a database of 2,000 investors. Customize it, personalize it, let them know you’ve done your research about them and look forward to speaking with them. Investors need to know why they should have a look at your startup.
6) Show them why they need to invest in you
Once you have the chance, make the ultimate use of it. Give them a reason to invest in your startup. Put your case in point and justify why investing in your startup is profitable for them. If your startup idea is one that hasn’t been done before, it would have a stronger chance at catching their eye. Demonstrate how your startup will solve issues that are not currently being solved by other startups.
If your startup idea is similar to existing startups, display how your idea is better in comparison, what’s your unique point, or how is it helping in solve a need that other similar startups can’t.
7) Establish your presence
If your startup hasn’t gone live yet, make sure you’re still out there and in people's’ mind. Whatever your startup is about - technology, education, travel - be active in that industry. Make informative and interactive guest posts, comment with your suggestions on blogs or posts, be active on websites like Quora. Make an addition to the industry and show them that you bring something new to the table. One of these posts might just catch an investor’s eye and they will reach out to you. This is a good option on how to find investors. To know the different kinds of fundings you could receive, visit here.
The points mentioned above are based on my knowledge on how to go about preparing to and approaching an investor. If you have any other tips or advice on how to find investors, make sure you leave a comment below.