If you’re a first-time inventor who’s looking for investors for your new product, chances are you’re feeling a little overwhelmed.
What do you need in your business plan? How do you find the right people to approach? And the most basic question of all: How do you know if your product is good enough to actually make it?
The answer to that last question is, of course, that you don’t. Unless you can see the future, there’s no absolute guarantee that your product will succeed, no matter how good your research is or how much time you’ve put into making your idea a reality.
The good thing is, though, that investors know that – perhaps better than anyone. So if you want to attract investors, you don’t need a foolproof business plan and a guarantee that they’ll all make money with you.
What you do need to attract investors is a great product and a whole lot of commitment – and the other things on this list won’t hurt, either.
A very, very good business plan
While your business plan doesn’t have to be absolutely foolproof, as we already mentioned, it does have to be strategic and well-researched. Investors are there to help fund your business, not make it run properly, although some are willing to offer advice and guidance when needed.
Consider adding a philanthropic angle to your business.
Many business investors are also investors in the common good, giving thousands of dollars annually to charity.
Adding a philanthropic angle to your business, if you don’t already have one, is not only a great thing to do – it will also make your business stand out from the crowd more. Also, since you’re going after a more specific group of people this way – business investors with an interest in philanthropy, or even a specific cause – you can target your pitch more strategically, giving you a higher chance at success.
Feel free to innovate when coming up with ways to incorporate philanthropy into your product. It doesn’t just have to be giving X percent of your proceeds to a cause. You could focus on employing an underserved group of people, donate some of your goods each month to a charity that could benefit from them, or have employees serve as mentors to young entrepreneurs.
Take advantage of any business experience or contacts you have, even if they’re in a different industry.
If this is your first product, investors are going to want to know that you have at least some business savvy. If you’ve worked in another industry for the past 20 years, show how that experience is relevant to what you’re doing now. You can incorporate this into your investor pitch.
If you’re just out of college, say, and you don’t have much work experience yet, be transparent with your personal finances. Do you have good credit? Do you have a plan to pay off student loans or other debt? Where else are you planning on looking for funding?
The same is true of contacts. If you have contacts whom you can politely get in touch with to let them know what you’re doing, do that – you can even add a gentle ask about any acquaintances that they think you should reach out to.
Get creative: enter startup competitions, consider crowdfunding, etc.
Although the internet has, in many ways, made it much easier to connect with the right investors, you still need to do your homework. Make profiles on angel investor sites. Look into crowdfunding – some investors find their next project on sites like Kickstarter and IndieGoGo.
If your business model fits the criteria, you should also look into startup competitions, which take place all over the country – not just in Silicon Valley.
Attracting investors as a first-time inventor can be an uphill battle, but it’s very doable. For more information on funding your product development, read our e-book “Funding Your New Project.”