Just like salespeople, you have to go through a funnel that takes you from qualifying investor leads to starting conversations. Here's four tips to make it work.
1. Building the Names of Your Investors
To further see how similar funding is to sales, you have to gather a long list of potential investor leads to start the investing funnel. This list might become long, though you'll quickly whittle this down based on investor reputations.
Most funding experts recommend compiling at least 200 names while using free and paid services to find the most reputable investor names.
Using free services like Crunchbase gives you an idea what kind of companies venture capitalists invest in. Be careful with paid services, though they bring thorough search and filtering tools.
2. Filter Your Investor List
You'll want to filter out investors you know won't realistically fund your tech startup. Here's some key things to consider to pare down your list further:
- Has the investor invested in a competing tech company to yours?
- The investors you have in mind may only be late-stage investors rather than seed-stage.
- Perhaps the investors only invest in tech startups within specific regions. Do they typically fund in the area where you live?
3. SEIS and EIS
If you're new to The Seed Enterprise Investment Scheme and Enterprise Investment Scheme, these can do a lot to help you attract investors because of their income and capital gain tax savings. Investors find these very attractive when they know investing with you can save them money.
As another sales tactic, you'll want to mention these to investor's if you're eligible. You'll need to have less than 25 employees and less than £200,000 in gross assets for starters.
4. Creating Conversations and Meetings
The more you can start discussions with your investors, the more you get them excited about your tech startup. By writing them an email with a noteworthy metric about your business, you'll perhaps be able to set up face-to-face meetings.
It's here where you need to perfect your elevator pitch by describing your startup in one sentence. Be sure to cover all the most important points about why your startup matters.