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Ever found a colleague or a friend leaving a stable, well paid job to create a start-up?
This is against conventional wisdom; still many people do that. Why?
Creating my own future or wanting to be my own boss or wanting to create a remarkable something that leaves the legacy?
The uncertainty is the most common ingredient (yes, ingredient!) in a startup and that’s the exciting thing. In startups, things seem great one moment and disastrous the next. If you think, working with startups is very different from working with a well-established company.
In startups, many a time, the whole team is about 4-6 people. Your office is a nearby Starbucks joint (or your back-bedroom corner) and every new client call is an amazing success.
There are MVPs that take months in creating and there are features that need to be shipped in next 3 days.
Still you will find people who want to build next Twitter
There are more failed startups than successful ones and still you will find people who want to build next Twitter. There’s something about America where people, by default, keep faith in their ability to ride the uncertainty wave and build startups. What do you think? Is it worth spending your life creating a startup? Do you know what’s involved in creating a startup? Do you know how typically it works? And even more important, will there be anyone who will fund your idea? Do you know how to find the right investor for your startup?
Here’s how it goes
- You get passionate about an idea
- This is mind-blowing. You want to protect it from your friends (and a clever colleague)
- Still on a Saturday evening, you spit the idea out to a dissatisfied colleague who happens to be your friend too
- “Are you crazy?” Can this really work?
- Perhaps, Um..ah..! OK – let me join (and you’ve got a Technical Co-founder!)
- You list down 200 features that you think you must build for version #1
- But eventually you settle down to 15 features and start building a prototype
- You go to local startup meet-up group and pitch your idea and show the prototype
- Opps… the prototype sucks!
- And follows a series of even crappier prototypes and diagrams and drawings …
- Well, we need some real users to test it – analysts, critics and observers won’t help much …
- You got a user then two and then a more hundred few …
- Now you have a real product!
- You get lot of feedback from the users and you know the shortcomings of your product
- You feel you must change so many things to take the idea to the next level
- But you don’t have enough funds
- So you start searching for investors
- Investor questions, skepticism and pitches – all these continues but you want to keep you hands tied up on developing the product, but how …
… you may not know which investors to pitch. What kind of investors are interested in which kind of products. You keep meeting more and more people but may not be the relevant ones.
How to Find the Right Investor for Your Startup
Investors who invest in one type of companies are more likely to invest in similar type of companies. Here are five points about how to find the right investor for your startup.
#1 Shared Vision:
Ensure that your investor’s vision about the market is closely matching with yours. Investors choose to invest in companies whose business models and markets are known to them. This knowledge might come from previous investments or other work experience. Once you identify investors that share your vision, establish a healthy relationship with them and then present your idea.
#2 Seek Other Value Than Money:
What value other than funding the investor will bring in? A perfect investor will ask you questions that will enable you to look at your venture differently. If the only value investor brings is money then it may not turn out to be a win-win relationship and should be avoided. A great investor will make your company more valuable through not only their network but also insights.
#3 Participate in Meet-ups:
Attend conferences and meet-up events for entrepreneurs and VCs with all your heart – not just to have an evening drink or dinner but also to really establish a strong bond through your skills, vision and charisma. Focus on solving problems that pop up regardless how simple they are. Keep your pitches short with clear points and objectives. Let the potential investors feel the energy called “passion” within you. This way, you will attract investors who will share similar energy like yours.
#4 Connect the Dots:
If you can connect the dots between other investments that the potential investor has done and how she can leverage your idea, the chances of getting funded are increased.
#5 Take Data-driven decisions:
As a startup founder, a good idea is to keep an eye on how other startups in the same niche are doing. Startup founders can leverage RocketCompanies.com DB and take data-driven decisions!