Anyone can write a check, but the right financial partner helps you grow that investment and your startup. The best time to find the right investor is before you need funding, so take advantage of opportunities to connect with investors by joining industry events and meeting them in person. Building relationships early also makes it easier to convince them your story when the time comes to raise capital.
Startup funding typically progresses through four stages: seed, Series A, Series B, and Series C. Each stage requires a different kind of investor and a unique set of development milestones. Before you pursue funding, prepare your business plan to show that you’ve thought through the risks and opportunities of your idea and have a clear vision for how it will grow. You should also be prepared to share your company’s financials with potential investors, including detailed revenue projections and market analysis.
Seed funding is often the first step in a startup’s fundraising journey, providing small amounts of money from personal savings and the founders’ friends and family. In return, these investors receive significant equity in the startup. It’s important to make the terms of this relationship very clear and to document everything with legal documentation.
Angel investors are affluent individuals who invest in startup businesses in exchange for convertible debt or ownership equity. They can be found in online angel directories, at angel networking events, or through referrals from other business owners. Angel investors are particularly well-suited to support startups in their early stages or in specialized industries.
