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Founders: Who Should You Approach and How?

The right investors can help your startup scale.

❓ So who should you approach and how?

For those still in the ideation stages, an investor can mean the difference between your idea leaving the ground or never leaving your head.

So choose your investors based on who you want to work with, be friends with, and get advice from.

Here are 6 types of investors to consider:

1️⃣ Yourself

Investing your own money can be risky, but it also allows for complete control of the business void of any outside influence or conflicting visions.

💡 How to approach:

Your funds can come from re-invested profits from selling other services or a previous job.

2️⃣ Friends and Family

Make it clear that they are buying equity in your company, how much, and the risks involved.

💡 How to approach:

You can reach out to them with a phone call or email, and invite them over for a presentation. You know your family better than anyone, so tailor your methods to fit their personalities.

3️⃣ Crowdfunding

Choose whether to sell equity or reward backers with perks such as discounted products or early delivery.

💡 How to approach:

By using social media and sites like Kickstarter and GoFundMe, you can pitch your business idea and connect with people around the world who can donate money – all without having to cede any equity in your company.

4️⃣ Accelerators

Approved startups typically give up equity in exchange for access to an accelerator's network like their mentors, investors, suppliers, and vendors.

💡 How to approach:

Be sure to research the group before you apply, follow their instructions for joining, and make sure you meet the program specifications.

5️⃣ Angel Investors

They buy equity in your company in exchange for future profits and often take an interest in business operations.

💡 How to approach:

Personal introductions are the best way. Use LinkedIn and your professional and personal networks to find a common connection who is willing to endorse you.

6️⃣ Venture Capitalists

They have the resources to invest millions of dollars in your business. They take an active role in the direction of the company and may prioritize revenue over the founder's original vision.

💡 How to approach:

VCs are huge companies with large networks. Finding a common connection should be easier than with an angel investor. Send a deck the same day that you exchange business cards and never go into a presentation pitch without additional documentation should the VC ask for it.

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