The Power of Networking for Acquiring Startup Funding
Written by: Debra Atkins
A well-connected professional network can provide you with everything you need to fund your startup business. In order to make full use of this potential, you need to be ready when you’re introduced to potential investors. Your business perspective will play a lot into how well you can attract investors to actually give you offers. If this is proving to be difficult, then you might need to revise how you approach your business plan.
At the earliest stages of your startup, your main concern should be creating a succinct, realistic, and practical startup plan. Entrepreneur even advises throwing out the traditional notion of the long-winded business plan in favor of a single paragraph plan that contains everything you need to begin growing. It starts with answering key questions about your business, and then treating those answers like hypotheses or assumptions that can be tested regularly. From there you can create a checklist of actionable solutions that will allow your business to grow. Based on how things actually turn out, you can then revise the answers and solutions with more accurate ones that realistically reflect the nature of your business, giving you better actionable solutions or options. Keep revising your single paragraph startup plan based on how your business is changing.
Not only will this allow you to come up with a short, actionable, and practical business plan, it also gives you a quick and easily digestible explanation for what your business is aiming for. While there’s no doubt that there are still investors who are impressed with long-winded business plans, having a practical, zero-fat, single paragraph plan shows that you’re grounded and growth-oriented. It shows that you at least have the potential to become a slow but steadily growing startup, and that’s what investors are looking for. Here at Startup Financial Model we can tell you that making investors feel unneeded is the best way to get them to take you seriously. Before you think that this is counter-productive, hear us out.
The best way to leverage your professional network into a source of capital is by sitting at the table with an offer they can’t refuse: a company that already survives without external funding. Remember: networking is about mutual assistance. While your professional network can also be leveraged to provide you with initial funding, you can get much better results if you’re already somehow established. There’s nothing more attractive to an investor than a grounded company with a solid financial growth plan, which is something our Financial Forecasting Software For Startups can help you with.
You can also expand your professional network’s potential for funding through social media. Business.com notes that some online social networks are better for finding and securing investors than others. Sites like LinkedIn, Peerbackers, Twitter, Gust, Facebook, and yes, Kickstarter, all have the potential to connect you to investors who may be interested in what your company is trying to achieve. You can spread your business’ presence across several of these sites, but make sure to focus on the social network that you actually spend time on. While Twitter can be useful for building PR, and LinkedIn is awesome for finding second to third degree connections with actual investors, it’s easier to establish yourself and make connections with social apps/networks that you already use, even if it’s just Instagram and/or Facebook. The contacts you have on established, popular networks are all potential connections to investors and customers alike.
Offline, every social occasion provides the opportunity for networking and seeking out funding. Social calls with former colleagues can yield new contacts. Menlo Coaching advises that even campus visits can also be leveraged to expand your professional network – having positive interactions with school students and/or faculty not only distinguishes you from other applicants, it provides you with contacts who may be able to help you find investors. Never be afraid of talking about your startup business. Constant networking not only gives you more opportunities to find investors, it’s also a good way to start putting your name out there and create organic buzz for your brand.