
Where to find investors for a startup: The Landscape
As a consultant in Switzerland, startups often ask where to find investors for a startup. This is one of the most frequently asked questions because most companies need funding to maintain their operations. Usually, bootstrapping is not as easy as it sounds; it’s somewhat of a utopian dream.
Companies like MidJourney, an AI image generation company, have bootstrapped from scratch and reached over $200 million in annual recurring revenue. However, these stories don’t happen every day. Other companies, like GPT, have raised astonishing amounts of funding just to keep the process going, because running a startup can be costly.
If you want to know where to find investors for a startup, you have a few places to look. Before you start, you really need to have a small investment outreach plan. You need to know what you’re looking for exactly. For most early-stage startups, I would always advise them to go for accelerators like Y Combinator or 500 Global.
These accelerators can provide funding and act as investors, but they also offer guidance to help you start your company. Additionally, they give you significant visibility that you definitely need when launching a new startup.
Finding Angel Investors and Venture Capitalists
If a company is not interested in bootstrapping or joining an accelerator, the next best option would be to seek out an angel investor. Angel investors can be found everywhere; they could be your neighbors, parents, brothers, or sisters.
They are individuals who could potentially invest money with little restriction on you. There are also platforms that connect you with angel investors, but the market is massive because, as I mentioned, angel investors could be anyone.
Finally, if you’re looking for the “sharks” of the industry, those would be venture capitalists (linked are our picks for the best ones in 2024).
If you want to reach venture capitalists or private equity firms, you need to approach them through official channels, like emails or phone calls.
The chances of them responding depend on the VC, but they are minimal if you go through the traditional methods. So find investors for your startup where they’re socializing. Hence, Connect with team members of those VCs you’re trying to reach via LinkedIn.
Building Human Connections for Funding
However, you need to pause and think here; always remember that these people are human beings. If you send them a bulk message that sounds exactly the same, odds are you won’t get a response. You might be ignored or marked as spam.
So, if you’re interested in approaching people on LinkedIn, try to connect with them on a deeper level. Understand what they’re working on in the VC, whether they’re interested in the companies they’ve invested in, and start a conversation about that. You don’t have to dive straight into business talk.
You can begin by acknowledging something they’ve done, but keep in mind that this approach is becoming saturated in the market. I receive hundreds of messages on my LinkedIn profile from people saying, “Hey, I love your work at your company.
I would like to hear more about it. Let’s schedule a call.” I know they’re not genuinely interested in my company; they’re just looking for an investment. This is why you should be human. I respond to people who simply say, “Hey, I’m working at a company that creates pitch decks for entrepreneurs using AI. Here’s a demo; check it out.” This piques my interest because I would actually look at the demo. If I’m intrigued, I would respond to this person. That’s how you should approach it.
Summary of Strategies to Find Investors
So where to find investors for a startup? Let’s summarize strategies for finding investors:
Venture Capitalists: When approaching venture capitalists and private equity firms, reach out through official channels. If that doesn’t work— which is probable—connect with individuals or team members of those VCs on LinkedIn or other platforms by engaging with them as human beings.
Accelerators: If you’re in the early phase of your business, aim for accelerators. If you’re interested in bootstrapping, give it a shot. You could fund your company with your own revenue.
Angel Investors: Remember that you can find angel investors in every possible corner.