How to find an investor for your startup in 2021

Entrepreneurship is on the rise these days. What we see is a growing wave of people looking to entrepreneurship as a way to succeed. It is estimated that around 70% of Brazilians dream of being an entrepreneur and having their own business. Among these entrepreneurial actions, the growing number of startups that have been appearing in Brazil in recent years is remarkable. Startup means a group of people who invest their time in an innovative idea until it turns into a business. In other words, startup is a group of people looking for a business model that is repeatable and scalable. And one of the biggest challenges for these new entrepreneurs is how to find an investor for their startup. But before seeing the tips on how to get this investment, let's understand a little more about startups.

Everything you need to know before knowing the tips on how to find an investor for your startup

The startup environment has a very particular characteristic: uncertainty. An uncertain scenario means that there is no way to say whether that idea will actually work. The uncertainty that permeates startups makes investments in these businesses more risky. But the startup environment also has great advantages. Let's meet them now.

1-Innovation

As we know, every startup is based on innovation. Usually these businesses arise from an entrepreneurial idea and aim to innovate in some

area. It is this innovation they seek that makes them achieve rapid growth.

2- Scalability

A startup's business model needs to be based on its scalability. What does that mean? Scalability means that a startup is able to grow rapidly without requiring the same proportion of resources. For this reason startups have been growing so much in recent times.

3- Flexibility

One more advantage startups have over other business models is their flexibility. These businesses have the capacity and must be ready to innovate and adapt. This is because in this field it is necessary to validate innovation, which can generate some changes along the way.

4- Identity

As a company based on innovation, startups become original. With this, they gain an original identity in the market. Everything within a startup becomes particular and differentiated, from the product or service offered, to the means and processes.

5- Low bureaucracy

As startups are innovative companies, such bureaucratic processes are not necessary internally. As the processes used are also innovative, they are simpler to be put into practice. As a result, the speed at which the company operates and its development are more attractive.

Even though it is an environment of uncertainty, startups have enormous attractions. Due to the innovation they bring to the market, they are great opportunities for those seeking to undertake. In addition, the startups' business model also makes them attractive to investors in this field. Let's understand a little about what investors look for in a startup. These are definitely details that can help you understand how to find an investor for your startup.

What are investors looking for in a startup?

1- Structuring

As mentioned above, the startup environment is one of uncertainty. For this reason, to attract the attention of investors, startups need to be well structured. There must be well-structured ideas and plans for investors to feel secure in the idea.

2- Presentation

It is through the presentation that the investor will get to know a startup's project, which is why a good exposure is essential. The presentation must be well structured, showing the company's capacity for growth. In this presentation, the following must be presented: feasibility study, main differentials, prospects for gains.

3- Reputation

In addition to good deals, investors are also looking for startups that are formed by people with good reputations. It is necessary for the investor to have confidence that he is ahead of the project. That's why it's important to be concerned about ideas and self-confidence.

4- Team

Having a strong team is also a great strategy to get the attention of investors. The quality of the team brings the investor more security, this because it is natural that good teams have more capacity to make the business successful.

5- Partnerships

Look for partnerships that can contribute to the startup project. In addition to investors, it is important to get intellectual mentors. With successful partnerships, investors will be more confident about the development of the business. Generally, these mentors are successful companies and professionals in the field that support the development of startups.

But after all, how to find an investor for your startup?

Well, understanding what investors are looking for in a startup is essential to getting a good investor, right? And to facilitate your search for an investor, we are going to present some tips that can help you in this process.

1- Trust your business

One of the tips on how to find an investor for your startup is to know how to show confidence in your business and your investor. This trust is necessary for an alignment between the investor and the startup to occur. A strategic alignment similar to that of the company ensures that both the investor and the creator of the startup will feel more secure and confident in the development of the business.

2- Create a good business plan for your startup

A startup's business plan should be seen as a mapping of its business. Through this mapping, investments become more secure and the chances of success increase. The business plan will be responsible for defining the startup's long-term strategies. This plan must contain information on the products and services offered and their production flow. Market and target audience analysis, competitive analysis and business risk should also be part of the business plan. A good marketing plan should also be in the business plan, as well as pricing and advertising policies. Finally, the financial plans, cash flows and other statements must be presented. Based on this business plan, the startup becomes more solid and gives investors more confidence. Therefore, developing your business plan is a tip on how to find an investor for your startup.

3- Offer a solid foundation for the investor

When we talk about how to find an investor for your startup, we have to keep in mind that it will be necessary to offer them a foundation. What does that mean? This indicates that it is necessary to show investors what you, as a startup, are capable of doing. And in this respect, the more evidence that this business is viable, the better. Through this base, it will be possible to scale the business and show that this innovation is the result of a solid base with potential.

4- Learn to take advantage of and differentiate all types of financing

The process of creating and developing a startup can have several financing stages. This happens because during the process different investments can add something to the startup. The types of financing start with the so-called angel investor. This initial investment is made in order to capitalize start-up companies that have great potential. Another type of investment is Venture Capital, in this form of investment, risk investors are gathered. Generally, these investors are looking for more mature businesses, but which still need resources to develop. Likewise, the investment coming from investing partners is also considered risky. The difference is that the investing partners are more engaged with the project's identity than with its growth. Another form of investment is accelerators that provide resources and basic structure to drive business. The key to these types of investments is knowing how to leverage each one of them. But for this to be possible, it is necessary to be aware and know how to attract the right investment for the stage of the process. Knowing how to choose the type of investment is a great tip on how to find an investor for your startup.

5- Optimize your Networking

Networking is an aspect that every entrepreneur must be aware of. A good network of relationships and contact with professionals is one of the most important characteristics of the startup environment. This networking is achieved by attending lectures, conferences, courses and other events that favor networking. Through established contacts, it is possible to gain access to new ideas and potential investors. But it is not enough for the entrepreneur to look for networking and not be able to keep it. For this reason, it is necessary to stay active and always update investors and contacts about the startup's development. Another important part of networking is knowing how to take advantage of feedback and comments to ensure that the startup is growing in line with the opinion of its supporters.

6- Enjoy Equity Crowdfunding

Equity Crowdfunding is a form of Crowdfunding in which an online platform is used to connect entrepreneurs and investors. Through this option, the entrepreneur has access to an easier way of finding an investor for his startup. What makes Equity Crowdfunding so attractive is the ability to find investors without spending so much time. What happens is that, if the investor is interested in the project, they will have information and make contact through the platform. If the investment is carried out, the investor will receive through the platform their shareholding or shared title. This type of crowdfunding provides more speed and accessibility to investors. So it's a great tip on how to find an investor for your startup.

7- Count on accelerators

Accelerators are investors that aim to develop innovative businesses through their own structures. In this investment model, the startup has access to structure, mentors and even third-party capital. However, for a startup to be able to participate in the accelerator it is necessary to participate in a selection process. In this process, several factors are analyzed, such as the project, the team, scalability and potential. The role of the accelerator will be to assist the startup in all its processes. From its internal management to the search for its target audience and its acquisition of customers. All steps developed by accelerators aim to ensure that the startup can develop and grow in the market. In addition to all the support offered, accelerators can also function as investors making contributions to accelerated startups. In this type of investment, the accelerator asks for a share in the startup and provides it with the necessary investments for its development. The investment coming from accelerators is a great tip on how to find an investor for your startup. This is because it is a type of investment that provides the business not only with capital, but with support at every stage of the process.

8- Go to FFF (Friends, Family And Fools)

FFF represents, in English, Family, Friends, Fools or, in Portuguese, Family, Friends and Fools. But what exactly does this mean? This strategy is based on having people close to you to get the first investments for the startup. This type of investment is the easiest path in the initial phase of a project. This is because it is an investment by people close to you who will believe in the project more easily. Do you know why? Because they probably won't pay attention to the market situation, scalability or validation to bring capital into their startup. The FFF will be more focused on the relationship they have with the entrepreneur who developed the idea. However, this way of finding an investor for your startup should be viewed with caution. This care must exist so that professional relationships with family members are not confused. Thus, business relationships and personal relationships will be preserved.

See how finding an investor for your startup is easier after these tips?

As we saw above, there are several important points to attract investments for your startup. Understanding how to find an investor for your startup is related to the confidence you have in your project. And to be confident and guarantee a solid base for the investor, it is necessary to have a good business plan in hand. Knowing what type of investment and when to turn to it is also important, as well as establishing good networking relationships. Accelerators, FFF and Equity Crowdfunding are good sources of investment. How about starting right now to develop your startup and get the investment you need? Take advantage of these tips and go in search of your startup's development!