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Where Should a Startup Look for Investors?

Jeannine Klein
Jeannine Klein December 2019 4 min

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Do you have a startup that is ready to receive some capital assistance? On this page, we will break down what investors look for before investing in a startup, and a few of the best places to secure investment cash.

What Do Investors Look For in Startups?

Before you go off and try to find investors, it’s important that you are ready to put on a show. Remember that investors have money sitting around for a reason. They won’t jump at any opportunity to spend their money without some sort of assurance that they will get a return.

Therefore, it is imperative that you put in all the necessary work on your end to make an investor want to take a risk on you. Here are some of the factors that investors will check for first before deciding whether or not to invest in your company.

  • In a profitable and growing market
  • You have income already coming in.
  • A concise business plan.

In most cases, investors will simply want some assurance that it is a good idea to invest in you in the first place. If your startup is located in a profitable and growing niche, already has some income coming in, and you have a concise business plan to show them, they will be able to invest a lot more confidently

Where Should a Startup Look for Investors?

Need some ideas on where to find startup investors? Below, we will break down three of the most common platforms that startups generally turn to for investment capital.

1. Business Loans & Venture Capital Firms

The first place many startup owners turn to when they need some investment cash is from their bank. Getting a business loan from a bank, especially one you already do business with, can be a lot easier than going outside of your circle of immediate contacts.

Venture capital firms are another great way to get investment money for your startup. Companies like these make a living out of investing in startups. Usually, all they ask is for a stake in your company that they can later sell for more than what they invested.

Here are some of the top venture capital firms that offer investment capital to German startups:

Business bank loans are best for those who won’t mind paying a little interest as they pay back the loan. If you would prefer selling out a chunk of your business, a venture capital firm might be the better choice.

2. Crowdfunding & Kickstarters

Crowdfunding and Kickstarter websites have helped generate many different multi-million euro businesses. If you have a business idea which you just internally know will lead to success, other people will probably agree.

People generally enjoy helping others. Especially those who already have successful financial portfolios complete with assets that will last them the rest of their lives. Successful people often see younger and/or previous versions of themselves in aspiring entrepreneurs.

Here are some of the top platforms for online crowdfunding:

Although online crowdfunding can be hit or miss, there are many instances where people’s lives have been changed by them. If you put enough work into your crowdfunding posts and do a great job marketing them and asking around for help, it might just change your life too.

3. Ask a Friend or Family Member

When all other options fail, there is no shame in asking a friend or family member for help. Even if you want to make it on your own, getting help from people you know is usually one of the most financially sound options.

Especially if you are close with somebody who can afford to invest in your startup. This can mean a lot fewer interest fees and pressure for your business to grow quickly. If you know somebody who can afford to help you, this might even be the best overall option for you to consider.

Startup-Focused Banking

Penta is a world-class online banking service designed to help startups succeed. We offer various rewards and benefits which will help you minimize the burden of money and limited investment funds. Be sure to check out our Free Online Business Account and have your new account open by tomorrow!

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