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Smart Ways to Find the Right Investors for Your Startup

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Smart Ways to Find the Right Investors for Your Startup

Spearheading a startup is a dream for any young entrepreneur. It’s the beginning of turning your greatest idea from a vision into a reality. Of course, you can’t build a dream on passion alone. Launching a business takes almost as much money as it does dedication.

Many great entrepreneurs, including Palmer Luckey (founder of Oculus Rift), didn’t start their companies with a wad of cash in hand. Instead, they relied on capital from investors to take those first crucial steps into the marketplace.

Looking for funding for your startup? Here are 5 smart ways to find the right investors to partner with.

1. Prospecting Platforms 

An investor prospecting platform is a great starting point for a budding startup to find a suitable investment partner. As the name suggests, these platforms help you quickly and easily sift through a credible database to locate investors who are looking to acquire new projects. Crunchbase, for example, allows you to search for similar companies to your own and see which investors have partnered with them. You can search by region, investment type (e.g. angel investor), and round size.

2. Friends & Relatives

Our friends and families are typically the first people to tell us they believe in us. Through their unwavering devotion, we’re pushed to pursue our dreams. This strong bond also makes them good candidates for initial investors. Don’t be afraid to reach out to friends for small investments in your startup – you’re allowing them to get in on the ground floor of the next big thing.

However, there are risks associated with any startup. Use family and friends for early-stage capital but be wary of any large-scale investments that could backfire and damage your relationships. Having close friends with a stake in the business can often cause serious clashes over creative control and expenditure.

3. Crowdfunding 

In 2022, crowdfunding is more popular than ever. Crowdfunding sites, like Kickstarter, give entrepreneurs the chance to acquire large amounts of capital through several smaller donations from the public. Generally, ‘backers’ will expect a reward for their investment, whether it’s a pre-release copy of your product or just a shout-out on the packaging. For many startups, this no-interest option is highly appealing. 

Choose your platform carefully, as Kickstarter requires you to raise your total investment goal to receive funds. Go Fund Me, alternatively, does not. 

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