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Fundraising is a crucial part of any successful business plan, but attracting investors is often a challenge, especially in today’s highly competitive fundraising landscape. While investing can be game-changing at any point in a business, raising capital is especially important for startups as it opens doors for your brand to get started and run. Capital enables product development, team expansion, marketing efforts, and even direct mentoring and consulting.
When cash flow is tight, it impacts every aspect of your business, from your team members to the way you think. A lack of capital throttles creativity and innovation, while excess encourages them. However, it’s important to consider the type of investors you want to attract to your business.
From day one at Cloud Paper, we knew that every business decision, every employee, partner and ultimately every investor had to be fully aligned with our mission. They would not only vaguely support our cause, but wholeheartedly join the movement we are working to build. Building our support with this level of integrity inspires the commitment and enthusiasm of our network of supporters.
Understanding how to find and connect with the right investors and what to look for when it comes to your specific branding needs is incredibly important to building the capital required.
Here are some things to keep in mind as you begin your fundraising cycle journey.
Related: How to Sell Your Story Through Your Pitch Deck
Anchor your pitch in your mission and overall impact
When the foundation of your fundraising comes from the heart of your mission, you’ll attract the right investors the first time. Lead with the full dream – the overall impact you want to achieve and why your company is ready to fulfill that mission.
If an investor doesn’t have the same values or dreams as you, they probably aren’t a reliable and valuable investor for your brand. While it can be difficult to turn down capital as a startup, you’re better suited to focusing your time on investors driven by your vision.
Determine how much your investors should be involved
It was important for us to find investors who can develop and shape ideas together with us. While it sounds wonderful to be handed a blank check and never have to deal with it again, it’s important to realize that investors aren’t just defined by their checkbook.
Even more valuable than capital can be finding investors with business talent who can offer advice and guidance. Additionally, they likely have a network of people and resources that can open many doors—whether it’s finding even more investors or opportunities for strategy around development or marketing.
Determine which assets could benefit your business the most, then commit to nurturing those talents.
See also: 5 Tips to Perfect Your Elevator Pitch
You should have a thorough understanding of who your potential investors are before pitching them. Check their interests and values. Look for answers to the following questions to see if they might be a good fit:
- Where have you invested your money so far? What does that tell you about their values and interests?
- Do they prefer active or passive engagement? How much participation are you interested in?
- Does this investor have preferred industries to invest in? Do they typically operate in a specific geographic area? Does your business fit into these categories?
- What phase is your company in and what investment amount are you aiming for? Is this consistent with their previous investments?
Some investors prefer to be involved from the start, while others are more interested in investing when a company begins to grow. You don’t want to waste time and energy convincing them to invest in your brand new startup.
Tap on your network
Chances are, some of your best investors come from your network. Investing requires a deep level of trust, and it’s easier to trust someone you know, or at least trust a recommendation from someone you know.
If you can’t personally think of anyone who would be willing to invest in your brand, think about who you know who could refer you to someone. The difference in success rate between cold leads and warm leads is huge, so this is not a step to skip. Make a real effort to research your network and then ask for interviews.
Also see: 5 tips for navigating the relationship between entrepreneurs and investors
When all else fails, keep refining your brand and mission
At the end of the day, you will struggle to find investors if you have an unclear business plan and direction. Be clear about your brand positioning and your mission. Be serious about what you hope to accomplish and why you are uniquely positioned to succeed.
Take the actions described in this article and you will find that finding the right investors is not that difficult.