How entrepreneurs can connect with investors and secure funding

Securing funding is one of the most critical steps for any startup. Without it, your idea will simply remain that: an idea. For entrepreneurs, especially those dealing with the challenges of bad credit, the process can be difficult. 

In this article, we discuss some of the strategies and tools entrepreneurs can leverage to connect with investors and secure the funding they need to launch their businesses.

Understand your funding needs

First, you need to figure out what funding looks like for you. For that, you have to consider the following:

How much will you need?

This may be an obvious point, but a crucial one nonetheless. Calculate how much you will need to start and grow your business. This should include initial costs like licensing, inventory, equipment, permits, etc., as well as ongoing/operating expenses like rent, utilities, marketing, and salaries.

You should also break down the costs into all the constituent parts to ensure you don’t miss anything.

Prioritize spending

Identify which expenses are essential for getting your business off the launch pad and which can be delayed until you have more cash flow. Managing your budget properly can be the difference between making it off the ground and getting stuck in financial hell. 

Plan for contingencies

Account for unexpected costs. It may be hard, given unexpected costs are just that; unexpected. But, failure to budget for unforeseen circumstances at all is much worse. 

Your investment options

Depending on what your pitch is, you should tailor your approach to fit the kinds of investors likely to fund you. They often include:

Venture capitalists

VCs, as they are known, are professional investors who put large sums of money into high-growth startups in exchange for a share of ownership. They often look for businesses with significant growth potential and a scalable business model. VCs will often provide strategic guidance and industry connections in addition to funding.

Angel investors

These are wealthy individuals who often invest their own money into startups, usually in exchange for convertible debt or equity. These kinds of investors are often willing to invest in early-stage companies and may be more flexible than VCs. They can also provide valuable mentorship and advice.

Crowdfunding backers

With a good pitch, you could source funding from public sources such as GoFundMe, Kickstarter, or Indiegogo. This allows you to get small amounts of money from a large group of people and is great for businesses with a strong consumer appeal or compelling story.

Bad credit investors

Some investors are aware that entrepreneurs may sometimes have bad credit and need help getting their startups started. They set up platforms offering generic loans, as well as specialty deals that work flexibly with your idea to give you an option where few usually would.

Grants and Programs

Various government agencies offer grants and loans to support small businesses and startups. These funds often have eligibility requirements and may not require repayment.

Personal connections

Family and friends can also step in and help get you off the ground, but it is always important to approach these kinds of investments professionally and clearly outline terms to avoid potential conflicts. 

Network! Network! Network!

When trying to connect with investors, it is almost always a good idea to cast a wide net. In the modern world, this includes attending industry events, joining entrepreneurship networks, leveraging social media to showcase your ideas, and more. 

Networking, with the help of platforms like smartmoneymatch.com or AngelList, allows you to work out strategies that may not have been available to you without the perspective of a wider world. It also opens up opportunities to learn from other entrepreneurs looking for funding and improve your pitch to give it a higher chance of succeeding.