How to Find Investors for a Startup (Practical Insights + Curated Resource List) | ASPER BROTHERS (2024)

Venture funding experienced a noticeable shift in 2023. The total funding in the first half of 2023 was $144 billion, marking a 51% decline from the $293 billion invested in the corresponding period of 2022. The VC environment is increasingly competitive and there’s a growing need for more innovative and effective approaches to attract investment.

Despite these challenges, the number of high-value startups, known as “Unicorns” (startups valued at over $1 billion), continues to grow. As of June 2023, there were 1,215 unicorn startups worldwide, with this number having almost doubled since 2021.

This article aims to guide you through the intricate process of securing investment for your startup, navigating through the types of investors, where to find them, and how to effectively reach out and think like an investor. With the right approach and understanding, your startup can thrive in this challenging yet potentially rewarding ecosystem.

Understanding investor profiles

As you embark on the journey of finding investors for your startup, it’s crucial to understand the different types of investors that exist. Each type (profile) offers unique benefits and suits different stages of your startup’s growth. Here’s a breakdown of the investor types you might encounter:

• Friends and Family: Often the first source of funding, but comes with the risk of mixing personal relationships with business.
• Angel Investors: Individual investors who provide capital for startups, usually in exchange for convertible debt or ownership equity.
• Angel Groups: Collectives of angel investors who pool their resources to invest in startups.
• Family Offices (FOs): Private wealth management advisory firms that serve ultra-high-net-worth individuals.
• Corporate VCs (CVCs): Venture capital funded by corporations, often seeking strategic benefits in addition to financial returns.
• Government VCs: Publicly funded investment funds that typically focus on supporting national or regional economic growth.
• Regional VCs: Venture capitalists focusing on investments in specific geographic areas.
• Power Law VCs: Venture capitalists that operate under the principle that a small number of investments will generate the majority of returns.
• Multi-Stage Power Law VCs: These VCs invest in companies at various stages of their lifecycle, from seed to late-stage ventures.

Understanding these investor profiles will help you tailor your search and pitch, aligning your startup’s needs and growth stage with the right kind of investment.

Where to find investors for your startup?

You can go about connecting with investors in three ways: by employing your existing connections, joining an online community, or attending industry events.

Here’s a list of websites and events you should try:

Investor networking websites

By creating a profile on one of the platforms we mention below, you can succinctly showcase your early-stage startup to potential stakeholders.

Actively engage in discussions, utilize social media channels, and participate in virtual events to expand your online presence and attract investors.

# AngelList

• Official website: angellist.com
• Investor profile: Angel investors, venture capitalists, product managers, engineers, data scientists.

AngelList is a comprehensive platform with a large database of startups and investors, offering free fundraising options after profile creation.

# Gust

• Official website: gust.com
• Investor profile: Investment experts, angel investors, venture capitalists.

Gust offers resources like a CRM and legal documents, ideal for entrepreneurs seeking a one-stop solution for finding resources and investors​​.

# Angel Investment Network

• Official website: angelinvestmentnetwork.co.uk
• Investor profile: Angel investors.

Angel Investment is a large network of investors, providing resources like blogs and fundraising courses, suitable for entrepreneurs starting their capital-raising journey. It operates in the UK.

# Angel Capital Association

• Official website: angelcapitalassociation.org
• Investor profile: Qualified angel investors.

Angel Capital is a non-profit association offering professional development, networking, and advocacy, focusing primarily on investors from the USA.

# Angel Forum

• Official website: angelforum.ca
• Investor profile: Angel investors.

Angel Forum is a marketplace for entrepreneurs and investors in the Canadian market, offering networking and learning opportunities.

# Envestors

• Official website: envestors.envestry.com
• Investor profile: Angel investors.

Envestors offers a range of services and resources, including market reports and an academy, suitable for well-informed entrepreneurs.

# Golden Seeds

• Official website: goldenseeds.com
• Investor profile: Angel investors focusing on women-led businesses.

Golden Seeds is a network of over 340 angel investors dedicated to investing in women-led businesses​.

# Wefunder

• Official website: wefunder.com
• Investor profile: Diverse investors.

Wefunder is a JOBS Act-based platform allowing investments as low as $100, operating similarly to a crowdfunding site but offering equity instead of rewards​.

# Leapfunder

• Official website: leapfunder.com
• Investor profile: Angel investors, especially in Europe.

Leapfunder specializes in early-stage funding with a simple investment process, focusing on the European market​.

# US Investment Network

• Official website: usinvestmentnetwork.com
• Investor profile: Individual angel investors.

US Investment Network concentrates on investments based in the United States, offering detailed information about startups seeking funding.

# LetsVenture

• Official website: letsventure.com
• Investor profile: Diverse investors, especially in India.

LetsVenture is a large network for businesses in India, providing a suite of product solutions and risk management for investors.

Investor networking events

Participating in industry events can grant you and your startup the much-needed exposure.

Attend demo days, contests, and pitch competitions to meet potential investors face-to-face.

# Y Combinator Biannual

• Official website:ycombinator.com
• Event type: Tech Startup Accelerator
• Location:San Francisco, CA
• Investor profile: Venture capitalists, mentors.

Y Combinator Biannual offers investment and a three-month program to strengthen business ideas. YC operates since 2005 and is known for launching numerous influential tech startups.

# MassChallenge Early Stage Accelerator

• Official website: masschallenge.org
• Event type: Accelerator Program
• Location: Boston, MA; Providence, RI; Austin & Houston, TX; Mexico City, Mexico; Renens, Switzerland; Jerusalem, Israel
• Investor profile: Venture capitalists, mentors.

MassChallenge Early Stage Accelerator focuses on fintech, health technology, sustainable food, and blue technology, helping startups raise funding and accelerate growth.

# FedEx Small Business Grant

• Official website:fedex.com/grants
• Event type: Business Grant Contest
• Location:Online
• Investor profile: Corporations, business experts.

FedEx Small Business Grant awards significant funding and services to US-based small businesses. Ideal for businesses with fewer than 50 employees, under $5 million in yearly sales, and with shipping needs. Provides grants and FedEx Office services to each award recipient.

# MIT $100K Pitch

• Official website: mit100k.org
• Event type: Entrepreneurship Competition
• Location: Cambridge, MA (finale)
• Investor profile: Venture capitalists, mentors.

MIT’s $100K Pitch is open to teams/individuals, especially students. Offers mentorships, connections, and a significant grand prize for the best business ideas.

# SXSW Pitch

• Official website:sxsw.com/pitch
• Event type: Pitch Competition
• Location: Austin, TX
• Investor profile: Industry experts, high-profile media professionals, venture capital investors, angel investors.

SXSW Pitch provides exposure to innovative startups, connecting them with global investors. Suitable for startups that have recently launched a product.

# America’s Seed Fund

• Official website: seedfund.nsf.gov
• Event type: Funding Program
• Location:Online
• Investor profile: Government funders, tech investors.

America’s Seed Fund supports tech startups with up to $2 million for research and development. Focuses on startups in deep technologies with global impact potential.

# Startup World Cup

• Official website: startupworldcup.io
• Event type: Global Competition
• Location:San Francisco, CA (finale)
• Investor profile: Global investors across the board.

Startup World Cup is a competition with regional events leading to a final in San Francisco, focusing on healthcare, AI, and robotics. Offers exposure and connections with top-tier investors.

# LG Mission for the Future

• Official website: lgnova.com/join-the-mission
• Event type: Startup Competition
• Location: San Francisco, CA
• Investor profile: Corporate investors, tech innovators.

LG Mission for the Future targets tech innovators for a greener, healthier future. Offers collaboration with LG’s strategic team and potential business launch opportunities. The winner is also granted up to $100,000

# Rice Business Plan Competition

• Official website: rbpc.rice.edu
• Event type: Business Plan Competition
• Location: Houston, TX
• Investor profile: Investors, mentors, industry leaders.

Rice Business Plan Competition is a comprehensive program for student entrepreneurs Hosted by Rice University. It offers mentorship, investment opportunities, and substantial cash prizes.

# Schneider Go Green

• Official website:gogreen.se.com
• Event type: Sustainability Competition
• Location: Boston, MA; London, UK; New Delhi, India; Paris, France; Shanghai, China (finales)
• Investor profile: Technology experts, sustainability advocates.

Schneider Go Green seeks solutions for sustainable energy management. Open to students in engineering, marketing, business, or innovation-related studies worldwide.

# Cartier Women’s Initiative Awards

• Official website: cartierwomensinitiative.com/awards
• Event type: Women-focused Business Competition
• Location: Shenzhen, China (gala)
• Investor profile: Corporate sponsors, mentors.

Cartier Women’s Initiative Awards supports female entrepreneurs worldwide, offering cash prizes, mentoring, training, and peer support.

# SPIE Startup Challenge

• Official website:spie.org/startup-challenge
• Event type: High Tech Business Competition
• Location:San Francisco, CA
• Investor profile: Tech investors, business experts.

SPIE Startup Challenge focuses on startups in optics or photonics, providing a platform for viable new businesses in high-tech sectors.

# Hello Tomorrow Global Challenge

• Official website: hello-tomorrow.org/global-challenge
• Event type: Science and Tech Competition
• Location:Paris, France
• Investor profile: Global investors, tech experts.

Hello Tomorrow Global Challenge targets early-stage startups based on new technology. Held annually in Paris, it focuses on startups with strong impact potential.

How to reach out to investors?

Reaching out to investors is a critical step for any startup founder.

Let’s dive into how you can effectively connect with potential investors, whether through cold outreach or other strategies.

# Running cold outreach

Cold outreach refers to the process of reaching out to investors with whom you have no prior relationship or connection. It typically involves initiating contact through communication channels such as emails, phone calls, or social media messages.

There are a number of best practices you should keep in mind to make cold outreach effective:

• Find the investor’s contact info.
  Start by gathering contact details of potential investors. Use professional networks, investor databases, or email finder tools to collect accurate information​​​.
• Write a clear and compelling subject line.
  For email outreach, craft a subject line that grabs attention and encourages the recipient to open the email.
• Keep your message short.
  Your initial message should be concise yet engaging. Avoid lengthy introductions or detailed explanations in the first contact​.
• Focus on them.
  Tailor your message to the investor’s interests and portfolio. Show that you understand their investment strategy and how your startup aligns with it​.
• Highlight Unique Selling Propositions (USPs).
  Clearly articulate what sets your startup apart from competitors.
• Demonstrate market knowledge.
  Show that you understand the market dynamics, potential growth, and how your startup fits within this landscape.
• Give proof of traction.
  Demonstrate the progress and potential of your startup. Share tangible evidence like user growth, revenue, or market validation. If you can’t show these yet, any milestone will do.
• Be transparent.
  Be honest about challenges and how you plan to overcome them. Investors appreciate transparency and realistic assessments.
• Ask permission to send more info.
  Rather than overwhelming them with information, ask if they’re interested in learning more. This approach shows respect for their time and interest.
• Follow-up strategically;
  If you don’t hear back, a thoughtful follow-up can keep the conversation going. However, avoid being overly persistent or aggressive.

Effective cold outreach strategies

When running cold outreach, the following strategies may prove useful:

• Personalization: Tailor your messages to each investor, showing that you understand their specific interests and investment focus.
• Triple touch approach: Use multiple channels like email, phone, and LinkedIn for a higher engagement rate.
• Automation tools: Consider using software to manage and scale your outreach efforts efficiently.
• Networking: Use cold outreach not just for fundraising but also for building valuable business relationships.
• Marketing and recruiting: Leverage cold outreach to get press coverage or recruit top talent.

# Thinking like an investor

Understanding an investor’s mindset can significantly improve your chances of securing funding. Investors typically evaluate several key factors:

• Commercial viability of the innovation:
  Investors look for innovations that have a clear path to market success and profitability. Demonstrate how your product meets a significant, unmet market need and has the potential for multiple revenue streams.
• Competitive advantage:
  Clearly articulate how your product or service is superior to competitors. Leverage strategic partnerships to provide evidence of your startup’s potential to outperform others in the market.
• Execution capability:
  Highlight the strength and track record of your team and board. Show that your startup is well-equipped to execute its business plan effectively.
• Awareness of sector-specific risks:
  Address risks unique to your industry, such as regulatory challenges in healthcare. Present a well-thought-out plan to navigate these risks.
• Emphasis on good storytelling:
  Investors are influenced by compelling narratives. Craft a story that highlights your startup’s potential, addresses risks, and showcases your vision and leadership.

In conclusion, successful investor outreach involves a combination of effective communication, understanding investor priorities, and presenting your startup in a way that aligns with their interests and risk appetite. Personalization, clear value propositions, and strategic storytelling are key to engaging potential investors and driving your startup’s growth.

Conclusion

As the investment ecosystem continues to diversify and expand, opportunities for connecting with the right investors are becoming more accessible.

The key lies in leveraging innovative platforms, engaging in strategic networking, and understanding the investor mindset. With these tools and knowledge, founders are better equipped than ever to navigate the challenges of fundraising.

This evolving dynamic between startups and investors is set to foster a more vibrant, collaborative, and successful entrepreneurial ecosystem in the years to come.

Hi, my name is Mike, and I’m the COO of ASPER BROTHERS.

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