6 Actionable Ways to Attract Business Investors to Your Startup

By Jeffrey Slater

Do you have a viable idea that you want to turn into a successful business? Do you manage a startup that desperately needs some cash? Although many small business owners often rely on grit and determination to make it through, it may not be enough to keep your startup afloat. How can you successfully connect and pitch to investors?

In this post, I will share six practical tips on how you can attract startup investors.

1. Pitch a Specific Return on Investment.
Although many investors believe in your business, they still need to earn money out of their investment. It would help if you highlighted what they’d personally gain when they invest in your industry.

Whether it’s pitching to an angel investor, venture capitalists, or a rich relative, you have to convince and show them what they’ll be getting in return.

According to Michelle Dipp, the co-founder and managing partner of Biospring Partners, “It can be tempting to focus and fall in love with your business model. However, investors need to know what’s in it for them. One of the excellent ways to capture their interest is to show them what you’ll be getting in return.”
2. Prepare Solid Marketing Research.
To help secure your investment, you need to convince investors that you’re solving an actual problem and there is a market for it.

So, before talking with investors, you should do due diligence. Conduct market research so that you can lay down a solid foundation for your pitch. After all, you are  not likely to be starting an entirely new industry. This means that there are startups within your industry that are already doing what you want to do. The question is: what makes your startup different from the rest?

The goal here is to know who your key competitors are, the industry’s size, or anything that will identify you as a key opinion leader in the industry.
3. Develop a Fool-Proof Business Plan.
Once you establish what kind of environment you want to operate in, you need to outline a business plan and the things you need to do once you’re there. Your plan should be concrete enough to give you an idea of where your business will be heading

Crafting a five-year plan is a great way to start; focus on the details of the first year while becoming more general as you go forward. Most investors will focus on year one.
4. Create a Minimum Viable Product.
By coming up with a product (or service) prototype, you’re showing prospective investors that you and your team can produce the right product.

Ideally, this should be something that prospective investors can test out for themselves. You should also include your marketing and sales models. That way, your potential investors can know how you can generate profit from your products or services.

Keep in mind that your product doesn’t have to be perfect. What’s important is that you have something functional to present. Moreover, your investors are likely to advise on how you can improve your prototype and marketing strategy.
5. Choose Relevant Business Investors.
When choosing a public or private source of financing, you should identify prospective investors and their goals.

When choosing the right investors for your startup, you need to check whether their profile matches yours. This research includes knowing how often and how much they are willing to invest in your business. Another thing to look at is whether your investors will give you free rein to run your business or whether they will want to be involved. Are they financial or strategic investors? Strategic investors often have experience in your industry, whereas financial investors are more focused on return.

Before you pitch to a potential investor, check what projects they have under their belt. Doing so can give you an idea of whether they will prioritize your startup or not.
6. Seek Out Advice from Investors.
Rather than cold-calling investors and begging them to invest in your business, ask them for advice instead.

Cold calls and emails asking investors to invest in your startup come off as a desperate attempt to get their attention. Instead, it’s more helpful to seek advice from investors that you admire. By strategically reaching out to an investor and asking them for advice, you’re building a relationship with them. As a result, they can be more willing to invest in your startup.

This approach gives them the chance to point out any possible flaws that might be present in your startup, and it also shows them that you value their advice. Asking for genuine advice will help you land a highly engaged and passionate investor in your business.

In summary, if you own a startup and try to win over potential investors, you need to prove your worth. By applying the six tips listed above, you can attract the right investors to your business who can help provide a financial foundation for success. 


Good luck!

Jeffrey Slater is a marketing strategist and consultant who provides fractional CMO/VP services. Working on a startup idea and want to pitch investors? I can help.  Contact me at jeffslater@themarketingsage.com or give me a call at 919.720.0995.