Five Strategies to Secure Funding for Your Startup | Insights from the Other Side of the Funding Table

In December 2019, a significant conversation took place involving four local angel investors and entrepreneurs from the GROW Accelerator. The focus was on how startups can effectively seek and secure investments. For many aspiring businesses, the journey to attracting experienced investors requires careful preparation, especially given the limited time available to make their case.

Entrepreneurs often invest considerable time researching potential investors, practicing pitches, and seeking advice from mentors prior to discussions about funding. However, before any startup can engage in investment conversations, it must first navigate the entry process. Here are some best practices shared by prominent early-stage and angel investors from Southwestern Ontario for securing an investment meeting.

### Trust the Process
Lynn Davis, founder of Alegria 3 and chair of SWO Angels, emphasizes the importance of adhering to established procedures. Investors appreciate professionalism and clarity; thus, attempts to bypass the formal application process, such as contacting them directly at home or through social media, are discouraged. Investor groups typically have clear protocols to follow due to the volume of proposals they encounter, and sticking to these guidelines helps streamline communication.

### Provide Just Enough Information
Dennis Ensing, Executive Director of SWO Angels, points out that many entrepreneurs tend to over-explain their business concepts. Investors often receive hundreds of pitches annually, and they've developed a set of key qualifying questions to assess the potential of entrepreneurs quickly. As such, it's essential to deliver concise and relevant information without overwhelming the investor.

### Be Resourceful
Leveraging community resources can significantly enhance a startup's chances of securing meetings with investors. Ensing notes that warm introductions—where a trusted contact facilitates the introduction—can greatly increase an entrepreneur's chances of success. He advises entrepreneurs to utilize local networks, such as TechAlliance, to identify potential connections that can lead to investor meetings.

### Be Authentic
Entrepreneurs should showcase their strengths while also being open about their weaknesses. Identifying team members with strong presentation skills is vital for delivering an engaging pitch. The ability to tell a compelling story is critical, and it's important to emphasize the best communicator in the team, even if that person is not the founder.

### Allow Sufficient Time
Davis stresses that the fundraising process often takes longer than anticipated. Entrepreneurs should be prepared for a timeline that may extend twice as long as expected. Investors tend to be cautious with their funds, and understanding the patient nature of securing capital is crucial for entrepreneurs.

In summary, for startups looking to secure investment, it’s essential to understand the process, communicate effectively, leverage community resources, embrace authenticity, and be prepared for a lengthy journey. Connecting with organizations like TechAlliance can provide valuable support in navigating this challenging yet rewarding path.