Determine who your “investor audience” is
Certain investors have affinity towards and only invest in startups operating within certain fields (like tech, health care, or education). Likewise, investors provide varying levels of funding. Some will invest $200,000 in a single startup, while another will invest $1,000,000 in a single startup. Try to research investors before reaching out to make sure they’re a good fit for your startup.
Solicit while staying within the confines of the law
Currently, a general solicitation ban exists which prevents companies from publicly advertising the fact that they are raising capital. The SEC is expected to revoke this ban in late 2012 as it applies to accredited investors (individuals with a net worth of over $1 million or an annual income of more than $200,000), but the ban as it applies to unaccredited investors remains up in the air. Be sure to stay within the boundaries of the law by:
- Working within the confines of a closed investor-startup group
- Soliciting within your personal network
- Simply market your startup’s story rather than the fact that you are raising capital.
Those intrigued enough to visit your profile will be able to register as an accredited investor to request access to view your business documents.
You’ll need specific documents for investors
All investors will want to see specific (standard) documents before making an investment in your startup. These include:
- A pitch deck
- A business plan
- Financial documents (including projected revenue)
- An executive summary.
Do you need help creating these documents? Contact us at firstname.lastname@example.org for assistance!