A majority of today's tech startup founders rely on venture capital to scale fast. These entrepreneurs develop new products, expand into new markets, and hire top tech talent with borrowed money. In fact, venture capital financed 43 percent of companies founded between 1979 and 2013. Moreover, nearly 22,700 venture deals were struck in 2017.
Do you have what it takes to land top VC investment for your tech startup? Begin your search for a qualified tech startup investor by following these tips:
4 Tips for Finding a Qualified Tech Startup Investor
Ask for a Referral
The best way to get on an investor's radar is through a warm introduction. Every investor has their own criteria for investing; however, many will only invest in startups on referral. To get a great referral, start by connecting with industry leaders, mentors, and peers who have already navigated the VC landscape. Creating these kinds of relationships will not happen overnight. Put in the time by attending tech networking events, following up with your contacts, and finding new ways to add value to their lives before asking for a favor. One of the easiest ways to begin building your investor network is to join a tech campus.
The world's top coworking spaces routinely invite prominent VCs, angels, and advisors to speak on campus. Additionally, coworking spaces grant members with valuable opportunities to collaborate, exchange resources, and support one another. In this setting, members can meet with mentors and peers for guidance. In many instances, these contacts can recommend top investors!
Want to learn more about fundraising? Download our FREE guide: 12 Things You Should Know About Raising A Seed Round.
Join an Accelerator Program
Accelerators are fixed-duration programs that provide cohorts with workspace, mentorship, and development opportunities. However, exceptional accelerator programs do far more than help their participants develop product-market fit; instead, they provide introductions to top VCs, angel investors, and even corporate executives seeking partnerships.
Joining an accelerator can dramatically widen your network in a short amount of time. However, keep in mind that most accelerator programs require an equity stake in exchange for participation. For founders wanting to maintain complete ownership before achieving their first round, joining an accelerator may feel counter-productive.
We suggest you check out RocketSpace's unique accelerator model. The program requires zero equity from participants and includes a corporate partnership component that allows startups to quickly validate ideas, gain feedback and explore joint venture opportunities.
Take Advantage of Online Communities
Another great way to identify tech startup investors is to do some old-fashioned research via online databases. Here are the most popular websites for obtaining startup investor information:
- Crunchbase: This is the unofficial "master record of data" on the world’s most innovative companies. The organization leverages a strong community of contributors, the largest venture partner network, and in-house data teams armed with powerful machine learning to maintain relevant information on startups, venture capital firms, funding rounds, acquisitions and more.
- Gust: Gust provides a single common application for hundreds of angel groups across the world. Create a profile, and you will be guided through the process of honing your application and connecting with the right investors. Thousands of companies have used Gust to collectively raise more than $1 billion through the Gust angel network.
- SeedInvest: Investing in startups used to be reserved for VCs and high-connected angel investors. However, SeedInvest now provides a platform that allows the general public to invest alongside professional investors. The organization's selection fund is currently investing $200,000 alongside each company that successfully raises capital on its platform. The fund is targeting investments in 50 companies over the next two years.
Consult with an Attorney
We have spoken before about why every startup needs an experienced attorney to help them establish protections between founders, develop legal documentation and avoid tax penalties. But did you know the right attorney can also be a fantastic lead for connecting with an investor?
Chances are your attorney regularly deals with term sheets and other investment legalities. Ask them to introduce you to an investment client or two, and you might be surprised at the outcome.
Find Your Ideal Investor
Make no mistake about it: The tech startup investors who would be interested in what you are doing are out there! You just have to roll up your sleeves, conduct some research, and do some good old-fashioned networking to find them. The best way to begin building relationships with potential investors, hands-down, is to join a tech campus.
Meeting an investor via a warm introduction is significantly easier, and faster, than crafting the perfect cold email that may never be read. RocketSpace's curated tech community provides Seed to Series C-funded tech startups with flexible coworking arrangements, warm introductions to top investors, and a global ecosystem of resources and programming designed to accelerate growth.