1) Using online platforms to find investors
One of the most effective ways to find an investor for your business project is to use specialized online platforms where the target audience, potential investors, and owners of promising startups gather.
Advantages of online investor search:
- Fast and convenient method. No need to attend meetings and consultations—simply post information about your project on the website.
- Wide audience coverage. Interested investors from all over Europe can familiarize themselves with your proposal.
- You can choose projects suitable for your investment and directly connect with their creators.
- Opportunity to present your project in detail with calculations, forecasts, and presentations for interested investors.
- The platform acts as a guarantor of the transaction, conducts expert examinations, and selects projects.
Major European platforms for finding investors:
- AngelList (United Kingdom) - https://angel.co/
- Seedrs (United Kingdom) - https://www.seedrs.com/
- Companisto (Germany) - https://www.companisto.com/
- October (France) - https://october.eu/
- Startupxplore (Switzerland) - https://www.startupxplore.com/
To attract the attention of investors on such platforms, the project owner needs to present information about their project as comprehensively and attractively as possible.
Placement on popular European online platforms significantly increases the chances of finding funding for a promising startup. The key is to prepare a presentation skillfully and highlight the project's strengths effectively.
2) Appeal to Investment Companies and Funds
One of the most effective ways to attract investments to your project is to directly approach investment companies and funds. Unlike private investors, they are professionals engaged in investing funds in promising projects.
Advantages of seeking an investor through investment funds:
- Dealing with professional market participants for whom investments are the main activity.
- They have significant financial resources for investments in proven projects.
- They possess extensive experience in assessing investment risks and the potential of different projects.
- The fund covers part of the expenses for studying the project and legal support of the transaction.
- In addition to funding, funds can provide expert, consulting, and mentoring support to the project.
Main types of investment funds to approach:
- Venture capital funds - invest in innovative projects at early stages, ready for high risks.
- Seed funds - finance startups in the very early stages to develop the idea.
- Direct investment funds - invest directly in operating private companies.
- Government funds - invest in projects in priority sectors of the economy.
When preparing a proposal for investment funds, it is crucial to present key information about the project as comprehensively and attractively as possible.
The essence of the business idea, its advantages and distinctions, current stage of readiness, and existing results.
The potential and prospects of the project, market size, assessment of possible risks.
Project team, experience, and skills of founders and key participants.
Financial indicators and future forecasts.
The requested amount of investment, proposed stake in the project.
How the investor's funds will be used and how it will impact the company's development.
Preparing a quality and comprehensive appeal to an investment fund requires time, but it is one of the most effective ways to attract substantial funding from professional investors for a promising project.
3) Participating in Exhibitions and Conferences for Investors
Participating in startup exhibitions is a chance to personally engage with investors and receive feedback.
Exhibitions and conferences for startups are an excellent opportunity not only to present your project to potential investors but also to interact with them in real-time. Personal contact can play a crucial role in the search for financing.
Firstly, these events gather those who are specifically interested in investing in startups and innovative projects. You can directly address this interested audience in an informal setting.
Secondly, there is an opportunity not only to present your project to potential investors but also to have one-on-one conversations, ask questions, and clarify details. This allows establishing a closer personal connection.
Thirdly, at such events, you can receive valuable feedback about your project from investors. You can learn about their opinions on the strengths and weaknesses of the business idea and get recommendations for its improvement to enhance the chances of funding.
Finally, personal communication is an opportunity to make a positive impression on investors, demonstrating your knowledge, expertise, and persuasiveness. This can play a decisive role when they decide whether to invest in your project.
Which European exhibitions are worth visiting?
- Europa Summit (United Kingdom)
- Dublin Tech Summit (Ireland)
- Latitude59 (Estonia)
- Bonn COP23 Start-Up & Innovation Hub (Germany)
- Viva Technology (France)
To effectively use these platforms, it is essential to carefully plan and rehearse your presentation, focusing on the project's strengths. It is also beneficial to prepare presentation materials.
Equally important is collecting contacts of all interested investors after the presentation. This allows continuing communication on an individual basis. Personal meetings are often the key to successfully attracting funding for a startup.
Thus, participating in specialized exhibitions and conferences is an excellent opportunity not only to make yourself known but also to establish direct contact with potential investors. This is often the key to obtaining funding for turning your business idea into reality.
4) Appealing to Business Incubators and Accelerators
Business incubators and accelerators are valuable tools for startups, not only for receiving expert support at an early stage but also for finding potential investors.
Here's how incubators and accelerators help startups attract investments:
1. Conduct educational events where startups learn to effectively present their ideas and attract investors.
2. Organize meetings and demo days where startups can personally present their projects to interested investors invited by the incubator.
3. Have a wide network of contacts with potential investors, funds, business angels who may potentially invest in program graduates.
4. Assist in preparing project presentations and creating financial models to maximize investor interest.
5. Provide feedback on the business idea and offer recommendations for improvement to increase the project's investment attractiveness.
6. Some incubators and accelerators may invest in promising early-stage projects themselves or help attract larger external investors.
Some well-known European startup support programs include:
- Techstars (United Kingdom, Germany)
- Seedcamp (United Kingdom)
- Startup Wise Guys (Estonia)
- Wayra (Spain, Germany)
- Startup Sauna (Finland)
- Startupbootcamp (Germany, Spain)
- Rockstart (Netherlands)
To join such acceleration programs, it is crucial to present information about your project as comprehensively and convincingly as possible, demonstrating its potential and the thoroughness of the idea. This will help pass the competitive selection process and gain not only expert support but also access to investors for implementing your business idea.
5) Seeking Investors Among Acquaintances
If you've decided to seek an investor for your startup, don't limit yourself to large funds and platforms. Take a closer look at your circle of acquaintances – a potential investor may be much closer than you think.
1. Among your acquaintances, there may be successful entrepreneurs and top managers of large companies who view investing in startups as a capital investment option.
2. Personal acquaintance allows such a private investor to more objectively assess your potential, character, and chances of success.
3. A familiar businessperson can not only finance the startup but also provide valuable advice on project development based on their own entrepreneurial experience.
4. Investment terms may turn out to be more flexible and loyal than with an unfamiliar venture investor or fund.
Where specifically should you look for potential investors among acquaintances?
- Among businessmen whose companies operate in your industry.
- Among entrepreneurs with whom you have previously collaborated on joint projects.
- Among graduates of specialized business schools and startup courses.
- In professional communities and business conferences.
The key is to professionally and comprehensively present your project's presentation to interest your familiar entrepreneur. This increases the chance of attracting funding from a business angel within your social circle.
6) Appealing to Government Small Business Support Programs
Government support for small businesses is a significant stimulus for the development of this sector in European countries. Both at the EU level and within individual national programs, there is a range of measures to assist small companies. By seeking this support, entrepreneurs gain substantial advantages.
Key government support programs for small businesses in Europe:
At the EU level, the COSME program has been in operation for over 15 years, aimed at promoting the competitiveness of small and medium-sized enterprises. Its budget until 2020 was 2.3 billion euros. COSME provides loan guarantees up to 150,000 euros, co-finances participation in European business events.
In addition, there are European grants like Horizon 2020 for innovative businesses (up to 5 million euros), EUREKA for hi-tech startups (from 5,000 to 250,000 euros), and the EIF Fund, which invests in venture funds through the VentureEU program, with a volume of up to 430 million euros. The EaSI program allocates microloans up to 25,000 euros for the establishment and development of micro-enterprises.
Each major European country has its set of government support measures. For example, in France, there are preferential BPIFrance loans up to 300,000 euros with 1-3% interest, innovation grants up to 200,000 euros, and social entrepreneurship subsidies.
In Germany, besides European support, there are federal and regional subsidies, loan guarantees from the state bank KfW, and significant support for small businesses participating in international exhibitions.
Advantages of seeking government support:
- Access to affordable financial resources (interest rates for preferential loans as low as 1% per annum).
- Grants that do not require repayment or collateral.
- Consultation support and training.
- Assistance in finding partners and entering the European market.
Government support enhances competitiveness, provides funds for business modernization and expansion, and reduces costs. It also increases the investment attractiveness of the company.
How to apply for government program assistance:
To obtain government support for a small enterprise in Europe, one needs to contact the relevant organizations responsible for a specific program. The process typically involves the following steps:
1. Choose a suitable program (European or national).
2. Study the requirements and necessary documents.
3. Gather and prepare the document package.
4. Submit an online application on the program's website within the specified period.
5. Go through the project selection and evaluation procedure.
6. Upon approval, sign the contract and receive funding.
It is also advisable to consult with experts from government business support organizations in advance regarding the chances of receiving assistance from a particular program.
By utilizing government mechanisms to stimulate small businesses in Europe, substantial support can be obtained for launching and developing a business. The key is to choose the right program and properly prepare the documents when seeking assistance.
7) Placing Information about Investor Search in Media and Social Networks
How to find an investor for your startup or growing business? One effective method is to publish information about the search for investments in the media and social networks. This allows reaching a broad audience of potential private investors and venture funds.
Preparing Information:
To attract investor attention, prepare a specific and compelling description of your project. Key points include:
1. Description of the product or service - highlighting its interest to potential consumers and its uniqueness.
2. Current stage of startup development and achieved results - the presence of a working prototype, initial sales, the number of users, etc.
3. Monetization concept - how the company plans to generate revenue in the future.
4. Specific investment requirements at the moment and how they will be utilized. Include details on the amount, timelines, and the proposed share for the investor.
5. Expected growth prospects for the company and financial forecasts for the next few years - potential exits through IPO or business sale.
The more detailed the information provided in these points, the more chances to capture the interest of private investors or venture funds.
Placement in Media:
One way to inform a wide audience about the search for investments is to publish a press release dedicated to this in online media and industry-specific publications. There are many online journals covering technology, startups, and business. Additionally, there are specialized news aggregator platforms for investment topics.
Social Networks:
Thematic public pages and communities of investors, entrepreneurs, and startups can also be found on social networks. Posting announcements in these groups about the search for investments is another way to attract the attention of the right target audience of potential investors.
Investment Portals:
Currently, there are numerous specialized online platforms where information about investment projects is posted, and investors have the opportunity to familiarize themselves with them. These include online portals for investment searches, crowdfunding platforms, and more.
Registering on such platforms, posting a description of your project, and the conditions for investors significantly expands the reach of potential investors compared to independent search methods. Many investors use these specialized resources to find promising projects.
The advantage of online platforms is that they not only allow publishing information but also provide statistics on views, responses from investors, and facilitate communication. Some portals conduct preliminary expertise on incoming projects. The best projects are often highlighted, contributing to attracting investor attention.
In conclusion, a comprehensive approach to placing information about the search for investments for your startup or growing business on news websites, thematic communities in social networks, and specialized investment platforms is an effective way to attract potential private and venture investors.
8) Searching for Investors Among Company Clients and Partners
The search for investments to develop a business is often associated with approaching large venture funds or publishing information in the hope of attracting random private investors. However, among your own clients and partners, you can also find quite affluent sponsors. This approach has several advantages.
Why it's worth looking for investors among clients and partners:
1. They are already familiar with the company's products, services, and business model, understanding the industry's specifics. Therefore, there are high chances of capturing their interest in the prospect of investing in this business.
2. Among clients and partners, there is a higher level of trust in the company and its management. This is an important factor in the decision-making process regarding investment.
3. Such investors provide not only capital but also expert support in the company's development, using their experience and industry connections.
How to search for potential investors among clients and partners:
Analyze the client base and identify the largest, stable organizations working with the company.
Identify individuals with the highest ownership stake in these organizations or those making investment decisions using databases like SPARK, Kontur.Focus, etc.
Evaluate the financial position of these organizations and individuals, identifying real investors. Professional consultants can be utilized for assistance.
Organize personal meetings with potential investors among clients, present the project's presentation and business plan.
Maintain these contacts, regularly informing clients about new promising directions for additional investment in exchange for a share in the company's profits or stocks.
As for partners, it is possible to search for investors among equipment suppliers, specialized software providers, and component suppliers. There are cases where IT companies or manufacturers of high-tech equipment invested in startups actively using their products, expecting future sales growth.
Thus, in addition to traditional forms of seeking investments through funds and public offerings, it is worthwhile to pay close attention to your own clients, partners, and key suppliers. Personally aligned investments from them can be a good starting or additional capital for business scaling.
9) Participating in Competitions and Startup Shows
Participating in various competitions and pitch sessions for startups is an effective way to attract investor attention and secure funding for your project. Additionally, these events offer additional benefits for a young business.
- Reach the key target audience.
Such competitions and "show projects" attract individuals who may be interested in your startup—venture investors, business angels, prominent entrepreneurs, and industry experts. The event provides an opportunity to negotiate with several of them simultaneously.
- Receive feedback from professionals.
The jury of these competitions or the audience of "show projects" often includes experienced entrepreneurs, investors, and business development experts. Even if victory is not achieved, feedback on the project's strengths and weaknesses can be valuable for refinement.
- Build a pool of useful acquaintances and contacts.
Other startup founders you interact with at events can provide important advice, recommend the right investor or specialist to address specific business problems. This presents an excellent opportunity to expand your professional network.
Prototyping MVP (Minimum Viable Product)
Often, having a product prototype is sufficient for participating in a competition or pitch session, rather than a fully developed product. Therefore, preparing for such an event serves as a good incentive to "squeeze" an MVP from the team and start receiving initial feedback from the target audience.
PR and Visibility
The mere selection of a project for participation in a prestigious competition or its victory already allows you to announce the startup and attract attention. This is especially crucial for initial marketing and attracting the first clients/users.
How to Prepare and Participate in a Startup Competition
For successful participation, it is recommended to:
1. Develop a project description, refine the presentation and pitch.
2. Adhere to the time limits when submitting the application and pitching.
3. Provide clear financial indicators, figures, and forecasts.
4. Focus on specific investment requests, KPIs related to their utilization.
5. Highlight the project's strengths and competitive advantages.
6. Prepare responses to tough jury questions regarding monetization, scaling, and risks.
Thus, the active participation of startups in thematic competitions, "show projects," and pitch sessions can be considered a mandatory development strategy. It allows obtaining financing, contacts, feedback, and PR from professionals in the investment community with minimal expenses.
10) Utilizing Investor Search Services
Finding investors for a startup or growing business is a challenging task. Often, entrepreneurs expend a significant amount of effort and time on independent attempts to secure financing, yielding limited results. In such cases, it makes sense to avail professional services for investment search.
Who Provides These Services:
Several types of companies specialize in investor search services:
1. Investment Banks – handle the entire transaction process for attracting funding from venture funds and business angels.
2. Fintech Companies (investment online platforms) – connect investors through their financial marketplace on the Internet.
3. Consulting Agencies – offer services for comprehensive preparation of investment documents and negotiations with potential investors.
These organizations have an extensive client base of private and institutional investors. Additionally, they are well-versed in the requirements and preferences of these investors, significantly increasing the chances of attracting financing.
Key Advantages:
The main advantages of turning to a professional company for investment search include:
- Time savings for the startup founder, allowing them to focus on product development.
- Access to an extensive investor base, including venture funds, business angels, and crowdfunding platforms
- Assistance in aligning documentation with investor requirements.
- Preparation of presentations, business plans, and financial models.
- Consultations on investment attraction strategies in specific market conditions.
- Representing the interests of a startup in negotiations and supporting transactions.
Thus, attracting professionals to find investors increases the likelihood of success, alleviates many problems and allows the business to concentrate on its own development. This is a worthwhile investment, especially in the early stages.
