Finding investors for you next world changing idea is not
easy. Yes we have all heard the story of the guy doing a fundraising round in Silicon Valley and getting 50 Million dollars in 1
session That story leaves out the hard work that was put in the fundraising
project in the years beforehand.
We never hear the stories of the businesses which failed to raise
any money - because you guessed it right: They failed. Nobody likes a failing
story.
So where do you start?
Firstly: Put your own neck on the line. Don't expect other
people to invest in your business if you are not willing to put everything in
it.
I don't like this. I like having a safety net. But the truth
is that if you are not willing to put everything in you clearly aren't too sure
this is going to work.
Secondly: 3 F's - Family, friends and fools
You should go and ask your family and friends for money.
Most of your friends and family will love your startup idea. Until you ask them
for money. You will clearly see if they still think it's such a great idea.
Beware however with loaning money from friends and family. Make sure if your business fails you find a way to pay the money back.
There is nothing worse than going to the next Christmas meal and feel nothing
but dislike.
These investments will probably be smallish, but they
hopefully get you going.
Thirdly: Angels
Angels are people who have extra cash and are looking to
invest in businesses. Angels are investing their own money so they can be very
hands on. Often angels bring more than just money to the table - contact,
experience... Before you go and approach a angel group know what they are
about. Don't go with a oil drilling project to an angel group which specialize
in green energy investments. You will look like a fool.
Angels might invest substantial amount. Anything from 250000$
to 1.5mil. $.
Fourthly: Venture capital
These guys will probably only come in at a later stage and
come in with large amounts of money. They use other people's money.
Funding can be anything from 1mil $ to 10's of Millions.
My one word of advice: Remember to be wise in bringing
other people's money on board. Most people want something back. Make sure you
get a good deal and you give your investors a good deal.
Also follow you gut.
Good luck in growing your baby.
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