How do I best approach investors for a new startup?
I want to start a new office in the US to offer my products. I already have office in Sao Paulo, Brazil and more than 15 employes. What is the best way to approach investors in the US?
Most investors (angel, start ups, VC etc.) invite proposal through their website.
In the proposal, they would look at:
- Clear business rational
- Credible track record, may be over a few months as in the case of early stage ventures- however, knowledge of the ground realities and a functional business model is essential
- Credibility and capabilities of the promoters and operating team
- Repeatability of revenue model/Robustness of revenue engine
- Sound operating knowledge of the business
- Financial and cash flow projections: how realistic are they
- Returns/multiple: Min 3 times in brick and mortar/conservative sector and higher depending upon the industry space over three years horizon
- Exit strategy
If your presentation takes care of the above, they would seek an audience.
If you can successfully survive 30 minutes, your proposal would go through multiple rounds of discussions.
For an absolute pre-revenue start up, the business idea got to be cutting edge-out of the box.
Alternatively, it should have generated a very wide and large number of subscribers base so that your venture can potentially become an attractive platform for advertisers/other businesses to reach out to your subscribers (eg Face Book)
Wishing you the best!
Hi, I am very thankful for all help I have received.
Based on my question.
I decided to bring one of my Startups, Hitech Student, it is for Education Area.
I already have office in Sao Paulo, Brazil with more than 15 employes. I don't need a investor. I can support it, per 6 months.
About the Project
Hitech Student (Education)
* Web, iOS and Android, platforms
* Our system is focus in Education Content, Teach Control, ebook, etc
* We provide the best platform for students using tablets, ipad, smartphones and iphone.
* Students can edit read and edit ebooks, underline text, make comments (texting or speaking, we called it recording voice or comments)
*Tell the app to read for them, so students can use their headphones to listen all contents.
I have more features and also more information about this Startup.
If anyone wants more information, I can provide, please let ,me know.
302 261 5301
In my experience, the best way for international companies to approach investors in the US is to work with startup organizations such as HandsOn.tv who serve as intermediaries by providing you with a platform to pitch your company to Silicon Valley investors.
You could also reach out to US incubators and accelerators who also have strong connections to the US investor community.
I agree with Tom Fulcher on all said.
From the aspect of the business, I have seen the apps you currently have, you need to do an inital market research and find out current status in the US, as market such as US will have competition with the same ir similar product in place and penetrating some markets will be extremely hard, even though your product might be cheaper or provide better services. One of the fields that is hard to penetrate is education on a state or national level, and according to your profile there you might have a product to work with.
On the market of restaurant reservations you have extremely strong players (like OpenTable) and to get into their game could as well be tricky, your best bet would be to create a service for your country and then merge with big players.
But when I look at your web site you are actually not promoting any of the solutions but are presenting yourself as developer company, working as outsourcers. I think this is a bad position as you are just one of thousands of companies who offer the same service.
I would rather like you to focus and present your ideas and your products and sell that. Because investors like to invest into products and ideas not people (though they sometimes claim quite the opposite).
VERY carefully. Don't blow your best prospects learning on them. I have an audio CD course on this here:
You need 3 tools in this order that should be professionally done by an expert who has raised funds before. There are many traps and no new entrepreneur should attempt this alone without a coach or mentor.
1. Executive Summary (ES) - This is the bait to get intereste
2. SLide deck of 20 slides max (many other hidden and shown iff needed as answers to specific issues) - Never email - Always give in person if possible or live over Skype/GTM worst case.
3. Full business plan - Never give to anyone you have not pitched in #2 or mail cold.
That said most companies are NOT eligible for intstitutional venture capital but should first seek angel financing. It depends on many factors. I have eebn a CEO since 1989 and CEO Coach and advisor since 2002. I will give you a free 20 minute coaching call if you like with the objective to recommend a target audience for investors. . firstname.lastname@example.org.
It depends upon what you expect from the business association. If you are looking for business loan, then you have to provide a guarantee or security. In case if you are looking for your franchise, then you should shortlist those who are in the similar field and needs an expansion.
In my view, you need to first make a market study how you will launch your product and if there is any market for it..
Once you have a complete marketing plan to launch your product in US, then you can make a presentation to the investors and business groups. I am sure you will get some positive response.
I wouldn't hurt to position yourself online by talking about the problem you are there to solve and position the solution you offer. Also make it clear that you are looking for investors/partners to bring the solution or service to market. In case you are interested in knowing more, I have a free course that describes this process on http://capital-attraction.com/
U.S. laws about raising capital from investors are complex. Therefore, you had better find yourself a top-flight attorney who specializes in helping small ventures with capital raises. Then do exactly what she or he says. Such attorneys are not inexpensive, but the alternative is jail. It's your choice.
I agree with Tom it really depends on the business type and industry, the amount of capital needed, location and other variables. However, I think you're going to have to:
a.) go to crowd funding because I don't foresee too many angels or other investors who would be willing to invest in the expansion of a business into a new market, — FYI, they are going to want to see that you have skin in the game —or
b.) find a strategic business partner, or
c.) do it on your own by hiring either a freelance business development person/company or hiring a full time employee.
Expanding to a new market can be tricky if you don't have a complete understanding on that market's customs. Over the years I've found many foreign entities attempt to expand into the United States and fail because they:
1.) Don't understand that it will take time to gain traction, and
2.) don't want to invest the appropriate time and money in the market, and
3.) are unwilling to invest for the long haul.
They want instant sales and there are very few, if any, instant sales.
Depending upon your project and a the amount of money required, you could approach a local Angel Investment group or a Crowd Funding platform.
Many investors have a particular niche and area of expertise. In other words, they are more interested in investing in a product/service or business that they already know something about.
Because you appear to be offering a number of diverse products to an array of market segments, it may confuse investors. They will probably be wary of a lack of focus by you or your team. My suggestion would be to pick the "one" product for the U.S. that you believe will garner quick customer validation and, therefore, sales. Having traction in a particular market helps to convince investors.
Whatever you propose to do here in the U.S., investors will want a business plan and financial projections.
More importantly, they will want to know:
1. the product (and why it will be successful here in the U.S.)
2. the customer segment (and why they will want your product)
3. that your U.S. team will have the experience and expertise to execute whatever you propose
4. your tactical plan to show how you're proposing to spend their investment.
Hope these points help.
I'd find out who the influencers are in their network and be sure there was "buzz" about your ideas before approaching them. Then I would leverage "maybe you've heard about...and we're interested in your input and guidance because...etc.
Giving them an honest appraisal of your last 3 (or however long you've been in business years history) results and cash flow generation...Along with your history an add on business plan for the US speaking about why, where and how...Mission, Vision statements. know your costs and project sales based upon best, realistic and worse...
Tom has it pretty much covered. Financials will be a big part of successful investment fundraising. Especially providing a clear picture of how investors will get their money back. Another thing investors will want to know is who else is on your team, what is their expertise, and do any of them (or you) already have experience building/running a business in the U.S.
I totally concur with the above comments. You probably would also need to address compliance issues. This is one thing most investors will question.
Much depends on business type/industry, amount of capital need, location and a few other variables. Generally speaking, you will need a plan with financials, executive summary and need/use of funds statement. Your experience/success will be beneficial. Part of your plan will need to validate why experience in Brazil will translate to experience in the US.