Before you Google "How to find investors for startup"

Before you Google “How to find investors for startup”

What to do before you start seeking out options on finding investors.

By Gain Investors Staff

Great ideas are everywhere. From Steve Jobs, the young college dropout who would later on become the famous CEO of Apple Computers, to the young group of individuals of Saule Technologies who thought of a revolutionary method of heating homes. The major difference between the two? The ability to sell their ideas and, more importantly, themselves. It was their entrepreneurial spirit and drive, as well as their ability to market themselves, that separate the two from a win-win to a lose-lose.

You might think that you can sell your idea to anyone, and that may be, but can you sell yourself? Will investors, venture capitalists, angel investors, banks, etc., believe you when you tell them that you will make due on your promises of returning their capital? That you will put in all of the hard labor that is required and necessary in terms of skyrocketing your business? What proof do you have that your start-up, your great innovative idea, will produce the returns worthwhile that an investor seeks? That you will do your best, as you’re asking of them, to produce the returns on their capital they expect?

Here is the bad news: the problem with most start-ups is that they fail to realize the importance of being able to sell themselves. That is what investors are attracted to, not necessarily your great idea. The good news? You can prepare yourself before reaching out to investors and gain the advantage you seek. Still not buying it? Take a look at the numerous articles out there on ForbesEntrepreneur, etc. or speak to an investor. Investors invest in people that prove it not say it. Of course your business plan matters, in fact it is very important, but people invest in people.

Your start-up, just like your idea, should take over your life. You should live it, breathe it, dream it, etc. You should spend every waking moment working on or thinking about your idea. But it should never feel like work. If it feels like work, you are going to eventually become drained and you will give up. Not something an investor will be willing to invest in. Investors want to see what you have done and what you are willing to do. Ready to take the next step?

Good! Now on to persistence. Did you get that? PERSISTENCE. Be ready for it. You will hear “no” at some point when you are looking for funding for your start-up. Investors will tell you “no”. Be willing to work with this and learn from it, but never give up. You have to be persistent and flexible. Whatever you do, do not be overconfident either. You may think your idea will be an instant success once it hits the market, just like Facebook. The reality is that only 1 out of 100 will experience instant success when it comes to startups. Think long-term not short-term. Take venture capitalists for example, how do you convince asset managers to trust them with millions of dollars? You have to be confident and at least have some idea of what you are talking about.

Furthermore, start small. Do anything to progress your idea, but at least do something. Back to the whole “can you prove it?” theory. You launch your idea even if it is simple at first. Launch it, put it in the work, the time, your effort, your capital, and….. you can show that you are successful, even if it is something small. Did you invest your savings into your start-up? Borrow from family? Yes? That speaks volumes for itself to an investor. It shows an investor that you are willing to risk what you have. Even a basic version of your idea is better than no version. Remember that over-engineering, ideas that are too complicated, are dangerous.  Statistics show that 42% of startups fail because there was no market need for their product or service. So you have to prove that you are not part of this group. Start small, show that it works, that your market is right, and … well, at least you have upped your chances that someone else will risk their capital into your investment.

One more thing, value your community. Be sociable and approachable. If you hide behind your desk all day, no one will reach out to you. Know your market personally. Talk to potential customers and users. Utilize peer groups, social networks, entrepreneurial workshops, whatever it takes. Meet other founders and learn from them. Meet investors and create valuable relationships within your community. Those relationships will later give you valuable feedback. Just make sure that you communicate effectively. No one wants to wait days, weeks, even months for your callback or return e-mail. If you ignore people, you will lose respect within your community. Got it? Good, now sell yourself!