With incubators, accelerators, new granting schemes and crowdfunding platforms popping up everywhere, the possibilities to fund your startup are becoming endless. Yet the funds available are still limited, most of the individuals and companies that have the means to invest still regard seed stage startup investments as too risky, accompanied by disadvantages due to the complexity and dilution of shares of the Series A and subsequent investment rounds.
Depending on the characteristics of your startup, some or all of these possibilities can be suitable to you. Now that strategic investors are slowly opening up to startup investments, it is possible for a few to skip the VC rounds and sell to a corporate (with pros and cons to consider). Whichever choice you make on your funding strategy, it will be a lot of work and be prepared to be focused on it for a few months – without forgetting to run your startup. Finding a business angel is the essential step for many seed stage startups before the company is ready to enter the market, as well as being the step where most startups get stuck. Being an active business angel can be a full-time profession, so it’s also up to you to make it easier and beneficial for angels to invest in your project: be very clear about your strategy, what kind of sector experience (if any) you’re looking for in a business angel and value any cooperation offered that can bring your company further. Many angels may want to take an active role in your company and a board seat, especially if they are investing a significant sum.
It’s a good idea to contact your country’s business angel network and send a pitch deck or business plan of good quality. If they have someone among their members with the skills set you’re looking for, they can forward your material or you may get invited to present at private events. If you don’t hear back for a few weeks, kindly ask for feedback about your project. You can look into EBAN, the European trade association for business angels, seed funds and early-stage market players, gathering over 150 member organizations in more than 50 countries. You can submit your proposal on the site or find many useful links to your local business angels associations.
You can also create a profile and submit your project to one of these selected platforms that are very often used by business angels, VCs and other startup investors in Europe:
- F6S is an upcoming and fast-growing platform that mainly allows startups to apply to a variety of accelerator programmes, as well as a few business angel groups, investment funds, contests and events.
- GAN, or Global Accelerator Network, is also focused on providing startups with an easy way to apply for accelerators, and provides access to mentors.
- Gust is a global SaaS funding platform for the sourcing and management of early-stage investments. It is a great tool to use to get in contact with investors on a global scale, particularly if you want to introduce yourself to local business angels associations as well as managing your post-investment investor relations.
- Angel Investment Network has numerous country websites and allows startups to submit a proposal and fundraise with the angel investors registered.
- AngelList is a popular platform where startups can be vetted by a syndicate before being able to join the very active business angels community. Many investments seem to concentrate on the ‘hot deals’.
- INNEON is a platform for EU eco-innovation and sustainability startups. You will need to submit an application form and if your project is accepted, you will be offered coaching, resources and access to relevant business angels through matchmaking events and a dedicated matchmaking platform.
- SEP or Startup Europe Partnership is a platform dedicated to late stage startups to connect to corporates, also offering networking and learning opportunities to scale-up and find potential acquirors.
- Go Beyond is a platform founded by Brigitte Baumman, EBAN Business Angel of the Year 2015, in Switzerland. After a screening process, your startup can be invited to pitch in front of a group of investors. The network encourages collaboration and resource-sharing among business angels, as well as the tools to identify risky investment.
- DealMarket allows you to create a profile not only for startups but also for a variety of different types of investments. Interested investors will be able to contact you through the platform.
- Investiere is a closely managed platform for European companies, owned by Verve Capital Partners in Switzerland. Any startup can create a profile and feature on the companies’ list, but only a handful of companies that pass the set criteria (no seed stage companies, investment over CHF500k) will be featured as investment proposal.
Managing your profile effectively and communication with potential investors on these platforms can be a time-consuming daily activity, so I’d recommend hiring someone part-time to manage these activities. Choose one platform or two that are most suitable to your stage. Combine this with targeted offline networking events and if a potential investor shows interest, try to arrange a personal meeting and keep your leads updated on your progress. Many may express an interest but may only invest once you achieve significant milestones and build a customer base. Start working on this at least 6 months before you really need an investment – preferably even earlier, most investment decisions take much longer than that.
Featured image: Swarm, 2006 by Tom Molloy (Rubicon Gallery, Dublin)