How can a startup find an investor?
I first thought about my business in early 2008. I needed investments, so I talked a lot with all sorts of investors, as well as imaginary investors and consultants to find investors. I spent a lot of time communicating with them, and most of it was wasted. I want to share my accumulated experience of communication with investors and give some tips to other startups.
So, at the beginning of 2008, I had a business idea and a desire to quit my familiar workplace and start working for myself. The business idea was such that it required certain capital expenditures, but there was no own funds - so there was no way out without investors. Therefore, having started the development of a prototype, I began searching for investors. At first I conducted my searches for those who were well-known: venture and seed funds, associations of business angels, parties of startups. All this took a lot of time, but the result was 0.
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Why? Then I realized that any business that was not launched would almost certainly not be funded if an “man from the street” came to the investor - due to a banal lack of trust in such a person - the investor does not know and cannot verify the financial statements of his project to make sure he really knows how to make money. Unlearned business will not be financed by professional investors, since Many other start-ups turn to them for financing, and therefore such investors probably have more interesting financing projects that are at the stage of making money, and, accordingly, have higher confidence in them.
So, the first piece of advice is if you only have a business idea or an un-launched prototype system, do not waste time looking for investors in organizations that are professionally involved in financing start-ups. Or rather, it’s very useful to communicate with venture funds, business angels associations, speak at start-ups parties, etc., but this should be done in order to receive criticism of your project, development tips, potential clients and partners - but at the same time understand that the chances that you will find investors there are negligible. It is possible to find investments from professional investors with a ready-made project, which already generates some kind of cash flow, or with a high-traffic website — but definitely not when the project is at the level of an idea.
Where, then, should investors be sought? My second tip is to look for investors among your acquaintances and acquaintances, i.e. in the language of startups, "angel investors". There are a lot of wealthy people in Russia, for whom the amount of investment you need will not seem like a very significant amount, which they are willing to risk - especially since after the crisis other ways of investing money, such as mutual funds and real estate, have also become quite risky. Perhaps there will not be such people among the first circle of your acquaintances, but among the second they are more likely to be found. These people are unlikely to understand the technical details of your project, but if you describe it well enough in the language they understand, show your adequacy in matters of business and, most importantly, establish mutual 100% trust (this is easy to do if you have common acquaintances ) - then the chances of obtaining funding will be very good. So do not be lazy and write to all your former colleagues, friends on Odnoklassniki, VKontakte, MyKrug, Facebook, Twitter and Skype that you want to start your project and are looking for investors - this will be much more effective than stories about your startup to other startups. Personally, I found investors for my project that way.
If your acquaintances did not work out - there is a third piece of advice : think about who could enter your project not with money, which is always difficult to part with, but “in kind” - assets that can not be fully used by their owner and therefore will not invest in the project sorry (for example, servers or other equipment). I know a few examples when projects started this way.
Fourth advice - do not neglect those opportunities of support for start-ups provided by the state, because it provides support without entering the capital of your company, unlike investors. I don’t know how in other regions, and in Moscow, start-ups, for example, can rent space in a technopark on preferential terms (which our company does) - you just need to be able to clearly explain the usefulness of your project and not be lazy to write competitive documentation There are federal support programs that startups can take advantage of, for example, this fund , which provides funding to start-up technology companies.
And, finally, Captain Obvious gives the fifth advice - think, do you really need an investor, or can you still do on your own? The criterion here, in my opinion, is this - would it be bootstrapping, in which the project will develop without an investor, too tough for the project? In other words, will your project not suffocate the lack of funding? There are a lot of such examples - projects with brilliant ideas die when the team works on them as a residual, in their spare time.
In general, the main thing is a good idea, the skills necessary for its implementation, and your faith in the project, and there will be an investor. As the proverb says, “search and ye shall find” or “he who seeks will always find” :)
So, at the beginning of 2008, I had a business idea and a desire to quit my familiar workplace and start working for myself. The business idea was such that it required certain capital expenditures, but there was no own funds - so there was no way out without investors. Therefore, having started the development of a prototype, I began searching for investors. At first I conducted my searches for those who were well-known: venture and seed funds, associations of business angels, parties of startups. All this took a lot of time, but the result was 0.
')
Why? Then I realized that any business that was not launched would almost certainly not be funded if an “man from the street” came to the investor - due to a banal lack of trust in such a person - the investor does not know and cannot verify the financial statements of his project to make sure he really knows how to make money. Unlearned business will not be financed by professional investors, since Many other start-ups turn to them for financing, and therefore such investors probably have more interesting financing projects that are at the stage of making money, and, accordingly, have higher confidence in them.
So, the first piece of advice is if you only have a business idea or an un-launched prototype system, do not waste time looking for investors in organizations that are professionally involved in financing start-ups. Or rather, it’s very useful to communicate with venture funds, business angels associations, speak at start-ups parties, etc., but this should be done in order to receive criticism of your project, development tips, potential clients and partners - but at the same time understand that the chances that you will find investors there are negligible. It is possible to find investments from professional investors with a ready-made project, which already generates some kind of cash flow, or with a high-traffic website — but definitely not when the project is at the level of an idea.
Where, then, should investors be sought? My second tip is to look for investors among your acquaintances and acquaintances, i.e. in the language of startups, "angel investors". There are a lot of wealthy people in Russia, for whom the amount of investment you need will not seem like a very significant amount, which they are willing to risk - especially since after the crisis other ways of investing money, such as mutual funds and real estate, have also become quite risky. Perhaps there will not be such people among the first circle of your acquaintances, but among the second they are more likely to be found. These people are unlikely to understand the technical details of your project, but if you describe it well enough in the language they understand, show your adequacy in matters of business and, most importantly, establish mutual 100% trust (this is easy to do if you have common acquaintances ) - then the chances of obtaining funding will be very good. So do not be lazy and write to all your former colleagues, friends on Odnoklassniki, VKontakte, MyKrug, Facebook, Twitter and Skype that you want to start your project and are looking for investors - this will be much more effective than stories about your startup to other startups. Personally, I found investors for my project that way.
If your acquaintances did not work out - there is a third piece of advice : think about who could enter your project not with money, which is always difficult to part with, but “in kind” - assets that can not be fully used by their owner and therefore will not invest in the project sorry (for example, servers or other equipment). I know a few examples when projects started this way.
Fourth advice - do not neglect those opportunities of support for start-ups provided by the state, because it provides support without entering the capital of your company, unlike investors. I don’t know how in other regions, and in Moscow, start-ups, for example, can rent space in a technopark on preferential terms (which our company does) - you just need to be able to clearly explain the usefulness of your project and not be lazy to write competitive documentation There are federal support programs that startups can take advantage of, for example, this fund , which provides funding to start-up technology companies.
And, finally, Captain Obvious gives the fifth advice - think, do you really need an investor, or can you still do on your own? The criterion here, in my opinion, is this - would it be bootstrapping, in which the project will develop without an investor, too tough for the project? In other words, will your project not suffocate the lack of funding? There are a lot of such examples - projects with brilliant ideas die when the team works on them as a residual, in their spare time.
In general, the main thing is a good idea, the skills necessary for its implementation, and your faith in the project, and there will be an investor. As the proverb says, “search and ye shall find” or “he who seeks will always find” :)
Source: https://habr.com/ru/post/108040/
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