How startup attracts investors

Advising a start-up to attract an investor

That's it! You have THE best idea of ​​the century.

Neither one nor two of you believe that you are an investor who is raising and turning over millions.

Very gentle, before you go into business with Angels or Venture Capitalists (VC), there are some conditions that must keep you from starting a race that is not necessarily made for you.

The "startup" problem in France

In the past few years, and especially with the creation of French Tech, we've tended to use "startup" everywhere.

As a reminder: According to Wikipedia, a startup is a young innovator company with very high potential and very strong growth 🚀. If you take that definition at face value, there are - and fortunately - only a handful of startups in France. Fortunately, because startups have enormous financing needs and very often are not profitable.

Still, remember that the goal of a business is to make money; wagering money and not on a hypothetical resale (remember the 2008 crisis?). Hence, this abundance of "startups" has fueled competition in finance exponentially.

Your project may not be a startup, but it certainly deserves funding

That being said, your idea still needs money to exist.

First, take stock of your situation by asking yourself the following questions:

  • Do you have capital to contribute?
  • Has your company already been established?
  • Have you already generated sales or proven your concept?
  • Are You Profitable?
Depending on where you are, certain types of financing are better suited than others. Here are some things to think about when making up your mind. You are at the beginning of your project. If you are still in the idea phase, forget about business angels and VC. Remember, these are not the financiers who invest 1 to get 100 a few years later. If your project is not "tangible", you will not raise a penny. Don't panic, however, dozens of devices are available to help finance the beginnings of your future success. If your project is innovative, turn to an incubator first. That way you get

Grants with which you can largely finance the production of a prototype and its marketing.

Note, however: the grants work in most cases in the logic of 1 for 1 (imprisoned for € 1, € 1 contributed). You therefore need start-up capital in order to be able to apply for them. If you don't have start-up capital, there are honorary credits that are intended to support entrepreneurs at the start of their projects. Often times they are unsecured and prevent you from running into personal debt. It also sometimes happens that you need very little capital to start your project by combining pre-existing tools that are not perfect but act as a demo and therefore a POC (Proof Of Concept). This situation is often ideal for you to test your idea inexpensively. With this proof of concept, you can consider going to BA and VC.

Your company already exists and you have received your first funding

Honors, loans, love money, grants, all of these devices have made it possible for you to start a business and recruit your team. Great

What do we do now? There is only one urgency: sell quickly.

Bring your product to market and test it with your customers. No, the people you license or samples to are not "valid" customers. Real customers are people who are ready to pull out their blue card to buy your product or service.

When you have these first customers, pamper them to get their feedback and help your product move forward.

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Better to raise money when you don't need it

If you have a ton of sales on the table and you are looking for a partner to fund your development, you are in a much stronger position than if you run out of money and want to save your own skin. If you already have sales, you can consider visiting business angels or even VCs.

Did you know? BAs are generally suitable for a financing round of up to 1 million euros. VCs usually invest from € 1 million. For many you need to achieve at least € 10,000 dream monthly act or € 1 million annually. These numbers are arbitrary and used as a guide, but mostly reflect a trend of what is happening. With no sales, since you are an expert in your business, they will listen to you very carefully, allowing them to run a watch but are unlikely to move on with your project. Caution Make sure that a The competing project is not yet in his portfolio before you have implemented your entire strategy! Communicate to get noticed The more visible you are in the press, the more attention you will get, it's math. A PR campaign (press work) can therefore be specified for your solution, especially if it appeals to a B2C audience. It is more difficult to seduce journalists with a product that is intended for professionals.

Agency specialists can pass up expensive articles in the media. Be careful, they have no obligation to result and it is very expensive. You can also manage and contact journalists in a targeted manner yourself. In the same way, think of your visibility on the web and be smart: hack growth, attend or create events,

or SEO influencers are good ways to get visible in your industry and are therefore of interest to your future investors. Applications are not possible for many funds. They must therefore be noticed by a “partner”.

Also read :

7 tips for a successful crowdfunding campaign

Arrive prepared

The key is to arrive prepared. If you have any doubts, especially about your vision and numbers, you will cast doubts on the person you are speaking to about your ability to complete the project. An investor is looking for a ship's captain and a captain who doesn't know the buttons of his boat is severely blocked (no pun intended). Prepare a specific

Business plan

before and review your accounting and administrative fundamentals. You are likely to have mastered your pitch and knowledge of your market so you need to be solid with the numbers to add credibility to your project will you decide? Do you want to win over your customers or investors?

Also read:

Fundraising: 5 Tips for Funding Your Business