The Best Methods For Locating Investors Who Will Fund Your Startup

Despite having a great idea or even a product, it’s hard to find investors who can support you through the struggles and growth of your startup. You can’t blame them though. As 90% of startups fail in their first year, everyone has become skeptical about investing even in great ideas and pitches. 

Yet, despite the initial struggle, thousands of investors spend billions on startups every year. If you want to become one of those fortunate ones, you need to prepare a great product, pitch, and business plan. Furthermore, you need to understand the best methods that you can use for locating investors who will fund your startup. 

Families and Friends

The majority of startups receive financial support from friends and family during the idea stage. These are usually the people who are most committed to your vision or who are dearest to you and just want to see you succeed. 

Accepting money from individuals close to you might generate personal strain and worry. However, investors who are members of your close community tend to be easier to handle when you’re starting out.

Friends and relatives may not follow up or check on their investments frequently. But as the business expands, they will be eager to receive their funds back with profits.


Crowdfunding is the practice of using modest sums of money from a huge number of people to support a new business endeavor. Crowdfunding uses social media and crowdfunding websites to connect investors and entrepreneurs. By going beyond the family, friends, and investors, crowdfunding allows the startups to independently operate and perform. 

There are limitations on who can fund a new firm and how much they are permitted to invest in the majority of jurisdictions. These limitations are meant to prevent novice or less affluent investors from placing too much of their resources at risk. Similar to risks associated with hedge funds. 


Bootstrapping is the process of starting and growing a firm utilizing solely available resources, such as personal funds, personal network hardware, and garage space. This strategy differs from enlisting investors to supply funds or taking out loans to finance a company’s growth. To sustain your business with bootstrapping, you must make use of what you have.

If demand outpaces the company’s capacity to acquire inventory or raw resources to sell, growth may be constrained or impeded. In that case, you may want to start focusing on short-term rental property investment with Tech Vestor to grow your resources. 

However, by declining to share the financial risk with external capitalists you practically take all the risks. It’s better to not go the bootstrapping way if you’re not certain about the outcomes. 


An incubator firm is a company that is in the business of guiding early-stage businesses through the many stages of growth. They guide the startup until such businesses have enough technical, intellectual, and financial resources to operate independently.

Your startup will be encouraged to develop its concepts. You’ll also learn to explain them to clients and prospective investors throughout the incubation phase. After consulting with seasoned professionals and field testing their service or product with customers, companies frequently change course while participating in an incubation program.

It’s crucial to understand that incubators differ from accelerators. Despite sharing many traits, they each work differently and have somewhat distinct objectives. Accelerators accept startups with an existing business model and speed up their time to market. Incubators concentrate on businesses that are just beginning to turn their idea into profitable startups.

Angel Investment

High-net-worth individuals who support startups or entrepreneurs with financial support are known as angel investors. Typically, they do so in return for holding stock in the business. Finding angel investors among your friends and family isn’t quite uncommon.

Angel investors may contribute one-time capital to assist a firm get off the ground or continue funding to assist the business get through its challenging early phases.

In essence, these people are motivated and have the resources to invest in businesses. Cash-scarce startups should be happy about this since they find angel investors to be far more enticing than other intimidating types of investments.

Venture Capitalists

A private equity investor known as a venture capitalist (VC) lends money to businesses with strong potential growth in exchange for an ownership share. This might involve providing beginning capital or aiding startups that want to grow but lack access to equity markets.

contrary to popular opinion. Startups are not often funded by VCs right away. Instead, they try to target businesses that are in the process of trying to commercialize an idea. The venture capital fund will invest in these companies, support their development, and seek to exit with a large return on investment (ROI).

Venture Debt

Venture debt is a sort of financial funding used by startups and early-stage businesses. Venture debts are often paired with equity funding. Banks with venture financing specialization can offer venture loans.

As an alternative to equity financing tools, venture debt is widely employed. Venture financing, as opposed to stock instruments, prohibits the further reduction of the ownership interest of an existing investment in a firm, including its workers.

Most venture debt arrangements just need interest payments, not principle and interest. The payments are determined by the prime rate or another benchmark for interest rates.

Microloans and Mictolenders

The practice of giving tiny loans, or microloans, to entrepreneurs of small businesses is known as microlending. These small startups might not have access to conventional banking services or institutions. Instead, to meet their financial needs, many small enterprises use unconventional loan service channels.

The development of global interconnection has made microlending possible. Online connections make it possible for lenders and borrowers to discover one another and complete transactions. As a result, getting a loan is frequently simpler for borrowers because there are more linked lenders than ever before.

The Bottom Line

Hopefully, you’ve understood what it takes to secure investments for your startup. While bootstrapping is using the finances that you already have, crowdfunding and angel investment refer to securing investment from public or external investors. If suitable, you can pitch your idea to venture debts and incubators for a more sustainable investment opportunity.