A steady cash flow is the lifeblood of any new business, and that is because money is required in all facets of the business, from financing its day-to-day operations to paying staff to planning its short and long-term growth.
Although Securing early funding is vital for the launch and success of any start-up idea, the process can however be frustrating. When on the search for funding, new entrepreneurs can expect VC’s to slam the door in their faces without even asking to see their proposals. To launch their startups successfully, new entrepreneurs have to develop strategies to get the funding they desperately need.
As an entrepreneur, I’ve been down that lonely road on a number of occasions, and I know how much it can really suck. if this, too, is your experience, then I’d like you to know that’s about to change, because Mr. Gordon Miller, an entrepreneur and investor writing on his Quora blog has come up with mind-blowing ways you could get funding for your start-up via investors.
Here are all of them:
(1) Cold Call Submissions
There are lists of angel investor groups online and you research what firms do deals in what industries and then send your proposal to them for review. Your chances of even getting an answer is at best 1% and your chance of that answer being a yes is about that of getting hit by a car crossing the street while reading this answer. So, not good.
Chance of getting funded: 1 in 10,000,000
(2) Using a Deal Broker
Back before the internet, when dinosaurs roamed the earth, if you wanted to get the attention of an angel investor, venture capital firm or private equity firms you had to go to a broker, pay $10,000 – $20,000 to have them develop a plan for you and then use their connections as a broker to introduce you to the deal makers. Most of these “plan sharks” are just con men looking to take $20,000 of your money and have no more chance of getting you funded than #1 above.
Chance of getting funded: 1 in 1,000,000
(3) Online Communities
I have an account on Gust, SeenInvest and Crunchbase. I like all 3 for different reasons and enjoy the offerings on there. Most of the platforms don’t really provide a view of these opportunities consistent with what I look for, so I actually find them harder to evaluate deals on, but that is likely just me. I prefer reviewing deals directly. These sites have high profile investors that you can often see what they are investing in and invest alongside of them. It is hard to go wrong with a strategy like that.
Chance of getting funded: 1 in 100,000
(4) Crowd Fund It
An old friend of mine from college reconnected with me and invited me to dinner. I thought he just wanted to catch up, but it turns out that he wanted to pitch me an idea he had. Hahaha. Pretty clever. He had been working on the idea for 2–3 years at that time and had multiple prototypes and needed $100,000 to manufacture his first run of product.
I really didn’t give the idea much chance of success, so I jokingly said “You don’t need an investor, you should just put it on Kickstarter”. He called 3–4 months later and said “Thank you so much, you were right”. Always flattered when someone acknowledges that I know what I am talking about I asked him “Right about what?”
He said “I put it on Kickstarter with a goal of $100,000 and we hit that goal in less than 30 days and we closed out at $330,000.” This news was followed by stunned silence. WTF? People actually liked it. Go figure. He has now gone on to do another round of $300,000 and likely another one. Total revenue is likely over $1M by now with $500,000 cash in his pocket. You are welcome.
Chance of getting funded: 1 in 10,000
(5) Local Angel Investor Networks
I am a huge fan of investing locally. I have been a member of the New Dominion Angels, Denver Angel Network, 460 Angels, and VTIN. I am looking to finally join the DC Angel Network if I can find the time to get back and forth. Local investors have access to inside data on local business startups and can plug in you into a number of opportunities. Most Angel networks limit investment range from $100,000 to $500,000 with a typical investment being 10–20 people putting in $10,000 each or around $150,000-$200,000.
Chance of getting funded: 1 in 1,000
(6) Retain a Business or Patent Attorney
I have found that the best way to get introduced to people who know people is to hire the best damn attorney that money can buy, pay the retainer, take him to lunch once a month and then have them introduce you to other clients of theirs that are in similar industries that can help you move your deal forward. Cost it less, chance of success is higher and lunch is always good.
Chance of getting funded: 1 in 100
(7) Private Investors
The best chance of getting funded are private investors like myself who are actively seeking and building opportunities. While I have reviewed over 6,000 submissions off Quora, only 200 of those were well researched, properly formatted and clearly presented. Of those 200, I am moving forward with 20 of them over the next 2 years. That is much better odds if you have your act together.
If you don’t know if you are ready or you are not sure that you are ready, then you likely are not ready for someone to review it. If you have something that is ready, then it is the best chance of moving forward you will find.
Chance of getting funded: 1 in 10
Got any thoughts? Kindly leave a comment below