If you want to start a new business, one of the first things to consider is how you’ll raise capital for your startup. While borrowing is one option, finding investors can offer you more financial freedom as you launch your business. In looking for investors, it’s important to know how each type of investor can be motivated to invest their disposable cash in your business.
Each angel investor is unique and has its own motivations for investing in startups. They’re equally distinct in the types of startups they choose to support. These are individuals who have come into the money of their own and want to give back to other entrepreneurs who are just starting out. This doesn’t mean they don’t want a profitable ROI, but they also want the bragging rights of helping the next Apple or Facebook succeed. Due to the diversity among angel investors, it will be helpful to know something personal about each investor before giving them your pitch.
In recent years, more focus for businesses has been placed on finding startups to invest in. Larger businesses can invest in a small startup, which could be crucial for establishing itself as a trustworthy business. Therefore, it is beneficial to help secure corporate investors to determine what types of incentives to provide in return. In addition to providing marketing efforts, incentives can also include exclusive access to new products and discounts on products or services in the future.
One of the easiest types of investors to read is the government agency that’s offering a grant. Regardless of the specific agency, most government grants are given to those entrepreneurs who can offer value to the community. If your startup will contribute to the makeup of a community in a positive way, add jobs, or address a social or environmental issue, you’ll be more likely to get the grant for which you have applied.
Once you know what motivates investors to choose one business over another, you’ll be in a far better position to pitch your idea. While you can use the same basic pitch, it should be slightly modified to outline the incentives that appeal to each investor. By personalizing your pitch in this way, you’ll improve your chances of getting worthwhile offers.