How to Find Investors and Pitch Your Startup How to Find Investors and Pitch Your Startup

If you're a startup founder, you've likely already spent countless hours developing your product or service, doing market research, and building a business plan (on top of the countless other tasks entrepreneurs take on). However, once founders do all of this hard work, they are faced with the daunting prospect of finding potential investors to help them achieve their business's growth goals. 

Key Takeaways:

• There are a variety of funding sources available to startups, each which can help founders achieve different goals.
• When meeting with investors it’s important to tailor your pitch to their investment thesis.
• Be sure to practice your pitch down to the minute and leave time for introductions and questions.
• Be specific about what size investment you’re looking for. This will signal to potential investors that you’ve done your research.

Finding the right investors to get in front of, and then successfully pitching your business idea is a formidable hurdle for early-stage businesses in particular. Below, we'll outline some helpful tips on how to get in front of investors that will help your business grow as well as some guidance on how to prepare pitch deck.

How to Find Investors for Your Startup

While finding investors is an unenviable task, the good news is that there are more funding options than ever before for founders looking to start building their business. Many companies have launched platforms to help founders research potential investors (including angel investors and VCs). A quick online search should turn up several options for founders looking for successful investors who have experience working with startups in specific industries and market segments. 

Angel Investors

An increasingly popular option for founders specifically looking for angel investors are angel networks. Organizations like Launchpad Venture Group or the Angel Investment Network (and many others) are comprised of thousands of angel investors who have outlined the type of investment opportunity they are looking for, making it incredibly easy for founders to connect with investors who understand their business concept. 

Crowdfunding

Another more recent funding avenue for founders to pursue is crowdfunding which involves the use of an online platform to raise money from a large number of individual investors in exchange for the business's product or service before it's available to the public. This is an attractive option for startups as a supplement source of funding, but it can be difficult for founders to raise a significant amount of money this way.

Incubators and Accelerator Programs

A tried and true method of startup funding is the incubator or accelerator. Both provide startups with funding and other resources including office space, networking opportunities, and mentorship in exchange for an equity stake in the company. 

Small Business Loans

Small business loans are a great funding option for business owners with good credit -- a company may be able to secure a loan that will provide them enough capital to achieve early-stage growth goals. Financial institutions like Leader Bank help founders apply for small business loans, which give startups access to a set amount of funding which is required to be paid back with interest. The U.S. Small Business Administration has several startup loan programs including the SBA microloan which can provide founders up to $50,000 in funding to achieve a range of growth goals. In general, a good banking partner like Leader Bank's Startup Banking team can be an invaluable resource as they can provide the resources and networking opportunities founders need to connect with investors.

Social Networking

Social networking sites like LinkedIn, Startup Nation, and Cofoundr are also great resources for entrepreneurs looking to connect with investors. By searching by industry and specialization, founders will be able to network with the types of investors who have experience funding businesses in their space. 

Venture Capital and Private Equity

Another more traditional method of funding for entrepreneurs is venture capital or private equity. Both of these funding methods involve an exchange of funds for an equity stake, which has the potential to provide a positive return on investments for VC and PE investors if the company becomes successful. 

How to Pitch Your Business Idea

If you're pursuing venture capital or angel investment (two of the most common funding sources used by entrepreneurs), you'll want to be sure your pitch is tailored to the specific type of investor you'll be speaking with.

Most angel investors are high-net worth individuals but are investing on their own and generally do less due diligence than venture capital firms. This might mean that founders choose to give more of an elevator pitch when speaking to angels, focusing on a more broad overview of the business and growth potential. 

On the other hand, VC investors want founders to go into the nitty gritty detail when pitching. Venture capitalists are looking for founders to share specific details business models, financial metrics, growth projections, potential risks, details on the competitive landscape, and more.

No matter what type of investor you'll be pitching to, it's important to know how long your pitch will be. While most pitches are between 10-30 minutes, founders will really want to hone their pitch to the minute. Investors typically know whether they interested in you and your company in the first 3 minutes. Don't just try to compress all of the information from the 30 minute version of your pitch into 10 or 15 minutes. Do your research ahead of time to determine what information will be most pertinent to the specific investor you're meeting with. Taking the time before your investor meeting to learn about some of the other businesses they've invested in can be a huge help when it comes to refining your pitch. And don't forget -- always factor in some buffer time at the beginning and end of your pitch for introductions and questions. 

While it may be easy to get bogged down in metrics, growth projections, and other financials, it's important for founders to sell the story of their business during pitches as well. Be sure to impress upon potential investors why you're passionate about your innovation, what problem it fixes, and the emotional benefit it provides to your intended userbase. 

It's also important to be specific about what size investment you're looking for when delivering your pitch to give investors a sense of how much funding you're looking for, what you'll use the funding to accomplish, and roughly how long you expect their investment to last. If an investor asks how much funding you're looking for, it may be tempting to tell them you'll take however much they're willing to offer, but this type of answer can indicate to investors that you haven't done enough research and are thus putting more due diligence on their plate. 

It goes without saying, but one key component you'll want to be sure to include in your pitch whether you're speaking to an angel or venture capital investor is what your exit strategy is. This will let investors know how you plan to get them their return on investment. This could be an IPO, an acquisition, or a buyout, but either way it's important to be clear with investors up front with your exit strategy. 

Looking for more resources that can help you find the right investors for your startup and deliver the perfect pitch? Leader Bank's Startup Banking team has an expert knowledge base, personalized relationship banking services, and invaluable resources to help your business grow. 

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