So, you’ve got an innovative idea, but you don’t know how to find an investor to move it from the drawing board and take it to market? In this article, we’ll share the main options to make your venture successful.
Every day, we see brilliant ideas appear on the market, but we know that for them to flourish into effective businesses, a number of factors must be considered. And one of them is how to find an investor to succeed on the market and grow in scale.
This is even more important because, for many startups, failing to secure investments can be a death sentence. According to a survey conducted by the business analytics and tech market intelligence platform CB Insights, 29% of startups fail because they run out of money.
Even if you have the capital for an initial investment, at some point you’ll need to obtain additional funding in order to grow and scale up to the market.
That’s why, in this article, we’ll talk about how to find an investor for your idea. In other words, what are the main investment choices that can help you?
Additional reading: How To Scale a Business with a Venture Studio?
5 ways to find an investor
Today, there are a few different ways of raising funds for your idea or business, but we’ll talk about the five main options for you to study and understand which ones are the best fit for your business.
1. Incubators
If your idea, business, or startup is still in its embryonic stage, and you need some help smoothing out its rough edges before receiving seed money, this model is an option.
Normally, incubators are based on a regional or government directive. In addition, they invest public funds both in their own growth and in the projects they help develop.
Incubators are connected to universities and teaching institutions that support new entrepreneurs. Their business models are often structured like traditional consulting firms.
2. Startup Accelerators
Unlike incubators, accelerators look for startups that already have significant growth potential. In other words, startups that are currently growing and validating their MVP (Minimum Viable Product).
That means this funding option is managed by individuals using private capital for financing. They generally offer financial, structural, consulting, and training support in exchange for participation in the new company’s equity.
3. Angel Investor
In the vast majority of cases, an angel investor is an individual willing to invest in innovative businesses in their initial stage. In other words, those that already have a product or service, but still need a viable way to “get started” commercially.
They are often groups of entrepreneurs, known as angel groups, that support entrepreneurs by applying their knowledge, experience, and network to advise newcomers and improve their chances of success.
In short, it’s a type of corporation that resembles an offer to sell shares of the company to someone else, since these investors acquire a share of the business.
4. Crowdfunding
Generally speaking, crowdfunding occurs when many individuals contribute money to your business. These investments can take the form of small or large amounts—it all depends on what you offer them in return.
This model normally works best for companies with innovative ideas. This way, people interested in your product or service contribute to help get your idea off the drawing board and take it to market.
5. Venture Studio
This is our favorite investment option, because it brings together building a company with risk financing and establishes landmarks to speed up launching the business on the market.
One important aspect is that, while the entrepreneurs focus on developing the product or service, the VS offers day-to-day support; that is, everything from operational tasks to strategic ones.
In other words, the daily tasks are performed by the team of specialists composing the VS, which means that processes are optimized and results are achieved more quickly.
Now that you’re up to speed on the routes that need to be taken to secure funding for your startup, you can count on the people who best understand the subject to help you on this journey. If you have an innovative idea or business in the field of healthcare, and you still have questions about how to find an investor, we want to help!
Get in touch with us and let’s revolutionize the market together.