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Starting a business is challenging, but finding the right investors to fund your startup can be even more daunting. As a founder, attracting the interest of potential investors is critical to securing funding for your business. But with so many companies competing for limited investment opportunities, standing out from the crowd can be difficult.
To make your startup more appealing to potential investors, you should create a compelling pitch that showcases your business's potential and addresses their concerns. Below, 15 Forbes Business Development Council members provide some effective strategies for attracting investors and securing the funding you need to turn your business dreams into reality.
1. Increase Traction
Working with Founder Institute, a leading pre-seed accelerator, I've had the honor to meet and help hundreds of founders throughout the last eight years. The one thing that always attracts the investor's attention is traction. If people buy your product, it means you're on to solving a real problem for a real market. This is a must in order to start a conversation with an investor. - Janet Todorova, Founder Institute
2. Achieve Target Outcomes
Executing your business plan to achieve target outcomes in your planned time horizon is the best way to gain interest and funding. Obtaining revenue is essential, but showing an ability to plan and execute against the plan, remaining flexible, and adjusting as required, demonstrates predictability. A provable track record achieving against predicted results is very fundable. - Gary Iles, TraceGains
3. Be Clear About Financial Goals
As an entrepreneur, one should be clear about financial goals when pitching to investors. It is critical to put forth what problem your product or service is going to solve, and how it is different from others in the industry. A well-thought-out plan for growth, highlighting the skills and experience of your team with few successful past exits, adds to building confidence and trust among investors. - Praneeth Kudithipudi, Sacumen
4. Demonstrate Your Company's Value
You want to talk about your product or your company, but the value is in the eyes of the customers. What problem do you solve? What result could they expect? When you master the answer to these two questions, your customers and investors will better understand your business. - Mark Stiving, Impact Pricing
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5. Know Your Market And Your Team
Investors view your startup as a private stock purchase. One main aspect is what is your total addressable market, and how much of it can you garner (first-mover advantage too)? The second aspect is the team, their passion and their "skin in the game." You want the founders to have as much risk or more in the venture. They can’t just give up and hand the company over to the investor. - George Earle, Thoughtworks Inc
6. Present A Solid Business Plan With A Strong ROI Forecast
To attract investors, showcase your unique value proposition, prioritize your mission, build a diverse team, demonstrate market demand, provide a solid business plan with strong ROI projections, establish trust, leverage your network and anticipate and provide solutions for risk concerns to instill confidence. - Naimeesha Murthy, Products By Women
7. Discuss The Trajectory Of Your Company
Having founded two companies, the best way to get investor attention is by having traction and having the ability to demonstrate the trajectory of the company. Market factors and how a company compares to its competitors will also be important though the road to users and profitability are the most important areas of interest for investors. - Javed Laher, Mediaocean
8. Show Your Company's Growth Through Story Context
Being able to show your company's growth in a story context encourages people to investigate the background behind growth, which creates a buzz about your business and consequently attracts more interested people to investment opportunities. - Ahmed Ammar, LABS - Logical Applications for Business Solutions
9. Define The Problem And How You Solve It
Typically, investors are more interested in fields they are familiar with and understand well. Therefore, as a startup founder, it is crucial to clearly define the problem you are addressing and how your solution solves it. Investors evaluate your company's value not only through its assets but also based on your vision and the system you have built or plan to build. - Dylan Nguyen, FG Entertainment Network
10. Emphasize Your Growth Opportunities
Show the potential scale of the business and include a realistic compelling market analysis. Show a detailed business plan and emphasize the growth opportunities, both in the potential for sales but also the expansion of the startup. Show your track record of successful partnerships with high-profile brands, and trust high-level recommendations—these work better than any other advertisement. - Anna Jankowska, RTB House
11. Utilize Your Network
The best way to attract a potential investor's interest is to find someone to help make a warm introduction. Once you find that person, then provide them with an email with a short executive summary to communicate your business's value proposition, growth potential and vision for the future. Once they are interested, there will be plenty of time to wow them with your details. - Lomit Patel, Tynker
12. Express Your Passion For Building A Sustainable Business
While the pitch will change depending on the fundraising stage and type of business, passion about the problem you are solving and the ability to execute and build a sustainable business in that space are always top draws. You have to figure out a warm introduction to the potential investor. - Darsh Singh Mann, StartX
13. Integrate Subscription-Based Models
Right now, investors are really interested in businesses that integrate subscription-based models. These models can better guarantee forecasted revenue, build client loyalty and significantly increase the customer lifetime value through upselling, thereby valuing the company much higher. - Angelica Kopec, She Knows Business
14. Understand Your Product And What Sets It Apart
As a startup founder, a full understanding of your product or service and the industry would be most critical. Understand and fully explain your financial model and the assumptions driving the model and its viability. You need to show that your idea has an excellent and distinct differentiator. - Onyinye Ikenna-Emeka, MTN NIGERIA COMM PLC
15. Describe Your Company And Its Value In Two Sentences
Investors hear tons of pitches and have short attention spans. You should be able to describe your company in just a sentence or two, making sure to describe the value proposition and differentiation your company provides. - David Friedman, Venti Technologies
