Last month we tried something new in Funding Masterminds: an Idea Swap workshop, where our founders shared their tactics on how to find investors with each other.
We broke the workshop into three parts, and asked each of our Funding Mastermind community of founders to share with their peers: how they find investors, how they identify key people to facilitate introductions to investors, and how they engage with investors to secure that all important first meeting.
Our founders were brimming with ideas, so it led to a lively discussion where some fantastic ideas and tips were shared.
Many founders think that finding investors is going to be the hardest thing about fund raising. In reality this isn’t the case. There are lots of tools for helping founders find investors and – on our Funding Accelerator – we even provide founders with a “hit list” of investors who back businesses like theirs that they can reach out too. The hardest thing is generally getting an investor to respond to your social outreach, email, or phone call. They are busy people and will only respond if you entice them with what your investment opportunity offers them.
We’ll look at how you engage with investors in the next post in this series. First, we’ve summarised some of the ideas and tips for finding investors that came from our Ideas Swap
Attend industry events
One of our founders shared that they made first contact with an investor that subsequently invested in their company at an industry event. Investors similar to businesses have to generate deal flow, and if they have an investment thesis or only invest in specific areas e.g. Climate Technologies or Education this means they are likely to attend prominent events in those industries in order to make connections with founders. That’s exactly what happened to one of our Funding Mastermind founders, and it shows how being in the right place and meeting face to face can really help to find investors and build a rapport with them so you have a ‘hit list’ of ‘warm’ investors to approach when you officially launch your funding round.
Your close networks
Another practical tip shared by one of the founders was to look closer to home, amongst your friends and family. Your own personal network is a great place to start when finding investors, and also to get feedback on your pitch deck and business in general. If there are people in your close networks who have built businesses, raised funding themselves, or are experts in your industry it’s good to start ‘picking their brains’ about different aspects of your business, and asking for feedback on your investor documents e.g. your Executive Summary, pitch deck, or financial forecast. Making people feel connected to your business journey from the start will pay dividends when it comes to opening your funding round.
Tap into investor databases
There are a number of platforms that can provide data about investments and help identify potential investors – scribe.ai, MarktoMarket, and Ship Shape to name a few. These tools can help you find the names of investors who have invested in companies within your industry recently. One of our founders used these tools to narrow down a list of investors to approach based on their criteria and the minimum average ticket size they generally invested. This resulted in a list of ~400 investors which they then developed a cold outreach strategy to approach.
Signup to Newsletters and setup alerts
Getting intel on which companies have been funded recently in your sector, who has funded them, and if there are any new funds that have recently closed is a great way of also finding investors. One of our founders shared that they have signed up to as many industry newsletters as possible, and have also set up Google Alerts around ‘funding’ and ‘investment’, to identify potential investors and build out their hit list of people to approach.
Utilise LinkedIn Sales Navigator
Finding investors can be very time consuming, but LinkedIn is another great resource to find investors that are investing in your industry. It can be used to see the investors associated or following company pages within your industry, and makes it easy to connect with them. One of our founders shared that they have been using LinkedIn Sales Navigator which has made finding investors easier. It allows them to search people and filter by criteria, making it even easier to find investors and build a hit list to contact once they are actively fundraising.
Introductions from existing investors
A few founders said their first port of call for finding investors for their new funding round was to approach the people that invested in their business in a previous funding round. It’s a logical place to start. Current investors should be approached first to understand if they are willing to provide follow-on funding and exercise their pre-emption rights. As part of that conversation even if they choose not to follow-on, it gives you a good opportunity to ask if they know anyone who may be interested in investing, and if they could facilitate an introduction.
Customers and suppliers
Engaged users or customers is another place to start finding investors. One of the founders shared how they spoke to some ‘super users’ of their platform, who were so impressed by what they had built that they were interested in backing the company financially. Another founder who operated a Marketplace, also had a similar experience when launching the crowdfunding campaign, they found that both customers and sellers were interested in backing the company financially and participating in the crowdfunding campaign.
Startup networking events
Last but not least one of our founders said they had success finding investors at startup networking events. Events like these are becoming more and more frequent, and targeted to specific industries or regions. Similar to attending industry events, meeting people face to face is a great way to introduce yourself and your company to investors, and helps to make you more memorable and build rapport with investors which is harder to do via email or on a Zoom call.
We hope these tips have sparked some inspiration, and given you some food for thought about how to find investors.
In our next post, we will share more tips from our Idea Swap. This time our network of founders shared more practical tips on How To Get The Best Introduction To An Angel Investor.
Want to understand why a ‘Lead Investor’ is so important, and what value they can give your business aside from just money? Read our recent article: Funding Secrets: Why Having a Lead Investor Makes Fundraising Easier.
If you have questions about your funding round, why not bring them to our next Funding Strategy Workshop? It’s free, interactive and online. Reserve your place here
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