Internet of Things & You: Finding Investors to Fund Your IoT Startup

Business.com / Funding / Last Modified: February 22, 2017

With the Internet of Things becoming such a favored space for investing, it's easy to find investors if you have the right business model.

With cloud-based computing and the Internet of Things becoming such a favored space for investing, it’s safe to say that finding investors is fairly easy—if you have the right business model.

As a startup founder or decision maker, one of the first orders of business is to secure funding. But where do you start? Once your business plan is set, it's time to secure the funding you need to put the wheels in motion.

If you are ready to get your business off the ground by finding investors, here are some places to start.

Related Article: 14 Newsletters Startups Should Subscribe To 

Angel Investor Networks, Platforms, & Communities

Angel investor networks have done a lot of the work for you by consolidating data about angel investors in various regions of the country or going as far as providing a comprehensive national (and international) list of angel investors.

A great place to start is the Angel Capital Association, which provides a directory of angel investor members with links to nearly every member so you can learn more about what areas they invest in. The links to their own sites also provide a way to better understand their investment philosophy and the parameters of the investments they are willing to make.

Also try Angel.co, which is a platform and meeting place where startups and investors can find each other. A quick search uncovers many angels that list their interest in IoT.

Another place to discover the IoT investor for your startup is DreamFunded, which is a global platform of investors interested and ready to fund startups. By creating a profile, you can then be seen by thousands of investors while also using the directory to search by industry to find those IoT investors. 

Platforms & Gathering Spots for VCs

It’s important to follow what VCs are doing in terms of where they are investing and who is involved in what segment of the IoT environment. One way to do this is to use a venture capitalist research database like that provided by CB Insights. Its historical record on different VCs shows where they are putting their money. You can avoid pursuing an IoT-focused VC that has already invested in a competitor. Industry analytics and the names of VCs in your domain is a great launching point for pursuing funding.

Not every location for finding IoT investors has to be online. There is a lot to be said about face-to-face interaction. One place to start, which would be beneficial in many ways, is the growing presence of IoT conferences and trade shows.

For example, there is IoT Village DEFCON on August 6, 2015 and the IoT Evolution Expo from August 17 to 20, 2015 both in Las Vegas, as well as IoT World Forum in London from November 18 to 19, 2015 and the M2M World Congress also in London from April 26 to 27, 2016. More events and conferences are planned in various countries around the world, providing another way to find investors and learn more about what they want.

Sector-Focused Funds

You can find funds that have been created for the sole purpose of fueling innovation in the IoT sector. For example, the Nothings Fund, which is tied to Draper Nexus Ventures, is a fund that is looking to assist IoT startups, including their recent investment in Notion, a home automation company that makes sensors for home safety and security. They look to take an active role with customers, channels, PR or marketing positioning and other rounds of funding.

According to Salil Pradhan, who heads up the Nothings Fund, “We are always in search of the next big thing in IoT and welcome contact from entrepreneurs with a well-developed business plan for an IoT product or service. Our focus is in the early stages of a startup because we like to be involved in building it out and seeing it come to fruition.”

Accelerators and Incubators Focused on IoT

A brief search also uncovers numerous accelerators and incubators focused specifically on IoT. Not only can they provide funding, but they also have the space to work, collaboration features, mentoring, and connections that can get your startup launched. IoT Perspectives lists numerous accelerators and incubators by category, including their preferred participation stage in your startup.

Further research reveals an explosion of IoT accelerators, including some big names like Microsoft, who have thrown their hat in the IoT ring. According to a Silicon Valley Bank post, other corporations are also getting involved in the IoT investment field. The recent article listed the entry of Siemens with it Technology to Business Centers; Cisco’s one billion dollar investment and further plans to invest another billion by 2017; and SAP, which is the sole investor in Sapphire Ventures, a fund that invests in IoT startups and other technology companies. 

Related Article: The Office of the Future is Closer Than You Think

Help Them Find You

Whether you put your startup on a crowdfunding site to get attention, like many other IoT startups have done, or you start participating in industry events as well as writing blogs and contributing to others’ blogs, you can find investors by helping them see you in the crowd.

Some have even gone on television shows like “Shark Tank” and, while the sharks didn’t bite, other investors saw them and swooped in to invest.

Helping investors find you is where you can get creative. Maybe it’s a billboard in Silicon Valley or YouTube videos that go viral. Creating that buzz around your startup often helps investors who are already looking for the next big thing quickly take notice.

Final Thoughts

Now that you have found IoT investors, the hard part is next: convincing them to invest in your IoT startup.

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