Ways to find investors for a startup project

1. Precautions before finding investors for a startup project:

a. Research specific market information:

Finding investors directly affects monthly revenue and business performance over a certain period. Therefore, before finding investors, it is necessary to thoroughly research the following information provided by INMERGERS:

- Current reputable fundraising channels.

- Precautions to avoid scams in fundraising.

- Understanding the concept of fundraising.

b. Adhere to the 3H principles:

- Have a project plan: The project plan must be professionally researched, detailed, and feasible. If you lack the ability to write a project plan, you can consider hiring someone to write it.

- Have a team: Assemble a team of personnel to execute the project. The team should have expertise and dedication to the project. Particularly, the project owner plays a crucial role.

- Have a prototype product/service: Startups with prototype products or services are highly valued. They have a better chance of attracting attention and investment compared to startups that exist only on paper. It is even better if the product/service has been commercialized.

Research and adhere to the precautions before finding investors for a startup project.

2. Investment options that businesses need to be aware of

Private Equity (PE): PE includes various types of investments typically made by individuals or private organizations to acquire a company, fund a project, or make individual investments.

Venture Capital (VC): VC investments are managed differently and are usually designed to fund high-growth potential startup companies. VCs also provide expertise and support in startup business planning.

Angel Investment: Angel investors are individuals seeking high returns through personal investments in startup companies. They provide financial support to startups similar to venture capitalists but with smaller investment amounts.

3. The 6 stages of finding investors:

• Preparation: Prepare the necessary materials (adhering to the 3H principles) and other relevant content. This includes a detailed business project plan, a pitch deck introducing the project, a list of project members, a detailed investor search plan, and prepared scenarios and answers to potential investor questions.

• Search: Utilize multiple channels to find investors for a startup project. Specifically, compile a list of investors, networking organizations, investment funds, investment companies, etc., that have potential and relevance to the startup project. (You can search on the INMERGERS platform.)

• Contact: Typically, investors will request project documentation for initial evaluation. If the project shows potential and receives positive assessment, investors will express interest by sending a Letter of Intent (LOI) and scheduling appointments. Appointments are considered opportunities, so the business owner and team should be well-prepared and ready.

6 stages of finding investors

• Negotiation: Negotiation with investors is reflected in the detailed investor search plan. This plan will include information about the capital utilization plan, the amount of capital to be raised, equity ratios, investment forms, rights and benefits of the investors, and more. During the negotiation process, there will be many questions from the investors. It is important to pay attention to the principle of investment, as investors always aim to maximize their own benefits. For this reason, it is necessary to have a clear understanding of the project and the benefits that the business can bring to the investors in order to convince them and strike a balance of interests. The negotiation process can extend through multiple meetings.

• Decision: Quick decisions need to be made if a suitable investor is found.

• Commitment: Commitment is demonstrated by adhering to the terms of the contract signed with the investors. It also pertains to the trust and entrustment of the investors who have committed their funds for the purpose of the business's proper utilization, aiding in the construction and development of the project.

4. Ways to find investors for startup projects:

There are several effective ways to find investors for startup projects. Here are some typical methods:

• Find investment from friends and family: Typically, professional investors expect to see commitments from the startup's existing resources to demonstrate reliability. It is clear that if friends and family do not have trust in the startup or believe in its project and ideas, it would be challenging to expect strangers to invest money. At the early stages of entrepreneurship, investment from friends and family can be a crucial source of funding.

• Launch a crowdfunding campaign: Crowdfunding is a method of finding investment for a startup project that benefits the community, including business startups. If entrepreneurs are confident in the value and feasibility of their business ideas, they can share them with the public and hope for investors to contribute funds. In this form of fundraising, detailed startup ideas are published on a website. Throughout the campaign, potential projects receive commitments from investors until the required funding amount for the startup is reached. This approach is popular among young entrepreneurs, especially for projects that offer value beyond material gains. Sometimes, the funds raised through crowdfunding can be in the form of grants.

Ways to find investors for startup projects

• Bank loans: To secure a bank loan, you will need collateral or meet the creditworthiness criteria. While not always the optimal solution, it is a way to obtain funding for your startup.

• Join startup incubators: These organizations have become increasingly popular. Startup incubators often collaborate with major universities, community development organizations, and even resource-rich companies. Besides providing visibility for your startup idea, many incubators offer free resources such as office space and mentoring. This can be an effective way to find investors for a startup project from various fields.

• Bartering and exchange: This involves exchanging skills or available assets to obtain what your business needs. In other words, your business sacrifices a portion of its existing resources to acquire the necessary resources or capital for startup. For example, if you don't have the funds to rent office space but have a pre-existing computer system, you can negotiate to use someone else's workspace in exchange for providing computer system support. This mutually beneficial approach is quite common among entrepreneurs.

• Self-funding: Nowadays, the cost of starting a business is not necessarily high, and over 90% of entrepreneurs fund their startups through self-funding or personal savings. It may take some time to save up enough money, but the advantage of this approach is that entrepreneurs do not have to give up equity or control over their company.

Conclusion:

With over 15 years of experience in investment consulting, INMERGERS - an innovative platform for international investment - aims to help investors automatically connect with M&A transactions, business acquisitions, licensing, and distribution rights, as well as agency opportunities.

Join the MMatch business trading platform now to receive legal support and guidance on finding investors for your startup project, while connecting with SMEs to foster business development and achieve successful M&A deals!