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Looking to Get Your Startup Financed? This Is How You Do It

Learn how to get your business ideas financed.

Financial trends and news by Michael Sanduso
October 20, 2017
Short URL: http://vator.tv/n/4a67

business startup financing

It all starts with a problem that needs to be solved. Then one day the answer comes in the form of an idea. Before you know it, your idea turns into something more. Now you're ready to try and launch a startup. The problem is, you're good at coming up with ideas but not selling the idea to investors and others who have the funds to give your idea life.

Get a Handle on Your Startup Pitch

The best advice is not to run headlong into a pitch session without knowing who it is you are trying to sell your idea too. You must start by identifying which investors focus on your particular industry along with hunting down the kinds of companies they have a habit of funding.

If your startup idea feels like it fits with their investment habits, go ahead and strategize a good introduction via any networks you have. If you don't have any networks, that is one of the first things you must get done now before you do anything.

Once you have made some connections, contact them via email in order to introduce them in brief about your startup and what you expect to accomplish with it. Once they show some interest and have asked some questions, go ahead and ask them if you guys can do an in-person or virtual meeting to explain your goals.

Finding and Pitching to Angel Investors

Angel investors are those investors who supply startups, whether new or mature, with cash in exchange for convertible debt or owner equity. There are several types of investors:

  • Super Angels. These are investors with an amazing portfolio of CEOs and other rich and powerful people they can reach out to. These types can obtain tens of millions of dollars if not more in some cases. You better have a really good idea that will totally change the entire industry before trying to pitch to these guys.
  • Domain Angels. These are usually industry executives who have worked in a specific industry vertical for years or even decades. When they catch a whiff of your startup and the potential your idea(s) could offer that industry, they want to invest in it.
  • Previous-Colleague As Angels. This one is pretty self-explanatory. This is when one of your previous colleagues gets wind of your startup potential and has faith in you and your idea. Both the domain angel and the previous-colleague angel are some of the best investors to win in my opinion. They both are solid.
  • The Groups of Angels. They have a new term for this: crowd funding. This is one of the most popular forms of angel investing around now. The big video game producer that recently released Divinity: Original Sin 2, Larian Studios, used KickStarter to fund their video game company.
  • Family As Angel Investors. When all else fails, family can become angel investors. But this is my less favorite choice. A lot of problems can come about when involving family in your business. But if you have nowhere else to go, what the heck - give it a shot.

When all else fails, you can always look for other business line of credit. The most important thing is to find lines of credit that are not going to burden you down too much - avoid high interest or other things that will give you a headache later on.