Answer:
Investors can be a great asset to your startup and provide a wealth of industry know-how and contacts. Before you look into where you can find investors, you should consider what would make an investor a good match. The suitability of an investor will depend on the stage of your business, specifically:
- Whether you already have a proven product or service;
- Whether you have already raised capital; and
- Your particular industry.
Whether you have a proven product or service
If you haven’t developed a product or service and tested it with customers to determine what your business’ growth could be, family and friends will be your best investors at this early stage.
Whether you have already raised capital
If you have not raised capital before, your business may be a suitable investment for professional investors, provided you have developed, tested and launched your product or service. There are professional investors and venture capital firms that invest in the first formal capital raise, known as the seed funding round.
If you have raised rounds of capital before, there are also professional investors and venture capital firms that invest in later rounds of capital raising. If you ask a professional investor or venture capital firm what kinds of investment they offer, they will likely have a preferred point at which they invest in a business.
Your particular industry
Finally, the most suitable investor for your business will depend on what industry your product or service is in. An investor should ideally bring more than just funding. A fruitful investor-founder relationship may also include mentoring, industry know-how and contacts. You should look for an investor that takes interest in your industry. For example, there are several venture capital firms that prioritise investing in technology startups.
The best place to meet investors ultimately depends on who you are targeting. In many Australian cities, there are networking events targeted at startups and professional investors, venture capital firms and founders attend. You may already know contacts that could introduce you to a suitable potential investor. A warm introduction can go a long way in securing investment.
