FreshBooks banner ad

11 Ways First-Time Business Founders Can Attract Investor Interest

As a first-time founder seeking investors, what is one way to attract the interest of a potential investor?

Meeting with an investor

These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. YEC has also launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

1. Sell a Product, Not an Idea

Investors are not really looking for ideas, and if you do end up finding someone to put money into your startup, you’ll end up losing significant equity. As long as you and your co-founder can handle the financial burden, focus your energies on coming up with a great product. With that taken care of, approach investors and show them how you can make money for them.

Derek Robinson, Top Notch Dezigns

2. Tell Your Personalized Story

Tell your personalized story of how you got into your business or niche in your pitch. It should include a few personal details about yourself and your past work experience, and display why you’re passionate about your current niche. Include a few specific anecdotes as well. When a potential investor can see the face behind the business, so to speak, they might be more inclined to offer funding.

Andrew Schrage, Money Crashers Personal Finance

3. Do Your Due Diligence

Do as much due diligence on the type of investors you want before you pitch them. This will limit the pool of investors, and will make your pitches more personalized and compelling to the investors that you’re targeting.

Brian David Crane, Caller Smart Inc.

4. Build the Right Team

Investors invest in people, so if are you a first-time founder, you can pique the interest of potential investors by surrounding yourself with other people who have strong records. Bring on employees or board members who have played key roles in other successful companies, particularly in business that are in some way relevant to yours.

Adam Mendler, Beverly Hills Chairs

Pitching to investor

5. Already Have a Proof of Concept

So many entrepreneurs and creatives only have ideas that they feel could be a “game changer” so they talk a good hype about all of the hypotheticals. But a potential investor is a lot more interested in a business that knows its target audience, caters to that target audience and has recent success in capturing them.

Daniel Griggs, ATX Web Designs, LLC

6. Have Passion

If you are going to sell your idea to an investor, you have to be 100 percent in love with the idea yourself. If you’re green, investors want someone who is “all in” on their idea or business. You being excited will get your investors excited.

Colbey Pfund, LFNT Distribution

7. Focus on the Mission, not Money

I remember when I was working with a startup that was focused on their mission. They were so focused on the mission that investors came to them because they saw their potential. If you really want investors, then focus on your mission rather than the money. This will motivate investors to want to fund your company because of the “fear of missing out” effect.

Sweta Patel, Silicon Valley Startup Marketing

8. Have the Gold Standard: Revenue

Gaining traction, exposure and building a prototype are great steps. However, the gold standard is to have revenue which funds your operation. As a first-time founder, this will help craft your story, while also showing a promising track record of growth. Give your investors the peace of mind that you understand your goal is to attract customers to spend money on your products and services.

Krish Chopra, Nurse Practitioner Clinical Rotations

Content planning and creation

9. Have a Strategic Content Plan

A strategic content plan not only brings new customers to your website, but it also brings investors that are searching for the same thing. Find out what your customers are asking on Quora and write content that answers their questions. This will help you attract many customers, and maybe a few of those customers will be investors, as well.

Jared Atchison, WPForms

10. Build a Solid Foundation

For any investor to take a chance on a first-time founder, a significant leap of faith is required. Build an operation that investors will want to bet on by gathering a team of seasoned professionals with a track record of success. A great team will streamline processes and make them as transparent as possible, ensuring everything is in order for the due diligence phase of investor interest.

Ismael Wrixen, FE International

11. Have Social Proof

It’s well known that social proof is a key filter, most often in the form of a double opt-in introduction from someone the investor trusts. Understand that investors are betting on the horse (the business), the jockey (the founder) or the track (the market). Ensuring that you can speak articulately to each of those three will help show that, while this may be your first race, you are not an amateur.

Zvi Band, Contactually

About author

The YEC
The YEC 133 posts

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year and have created tens of thousands of jobs. Learn more at yec.co.

Funding Note

You might also like

Tips

How Your Addiction to Entrepreneurship Can Make or Break Your Success

If you read my previous post about startup addiction, here is a book I recommend you to read about how you can use your addiction to help you success, instead

Tips

Making Your Business Successful in 2012

Making a small business competitive in a global market can prove to be a challenge. However, with proper planning and foresight, mitigating some these potential problems will lead to success

Reviews

Is ZipBooks Really a Better Accounting Option than QuickBooks?

QuickBooks has been around for years, making it the best-known accounting software out there. Recently, they’ve changed from the traditional downloaded-to-computer software to an online-access software, which comes with pros