Startups are one of the most popular choices that the new generation is opting for a better, secured and bright future. However, there are a few important things to know, if you are willing to establish a new and successful startup. Concerning many surveys and research, almost 90% of the new startups die in their first year of operation. And amongst the various reasons behind this failure, the one that is the most prominent one, is lack of money and financial backup. Many of the startups that have enough potential to survive often stop operation only because they do not have enough funds to run and establish their roots in the market.
In case, you have an idea that has the potential to become a successful startup, then the first thing that you should look for, is to have enough funding and financial backup for it. This will help you survive the ups and downs of the market and establish a strong root for your business idea that can earn many rewards for you and people associated with it.
In this article, we will talk about the importance of having a financial backup while running a startup, along with the ways to attract the investors for your on-demand startup idea. So, stay tuned to know about building a successful startup that will have good financial support to survive the market vicissitudes.
Importance of having a strong financial backup while establishing the startup
Having a financial backup plan that can help you survive during the tough days of the startup is one of the most important things that you should plan in prior to the desired success. And as all the startup owner does not have enough funding at the start, you should seek for the investors who can invest their money to your on-demand startup idea to make it grow easily.
Most of the modern-day startups rely on the two kinds of investors that are considered more reliable than the traditional crowdfunding for startups. These two types are Angel investors and Venture capitalists. Both of the said investors have their pros and cons, and as a startup owner, you should choose the one that perfectly suits your needs, and can provide you with enough financial backup that can help you deal with the market fluctuations.
Angel Investors: What are they?
Before searching for the right investors for your startup, you should be able to differentiate between these two. Jumping straight to the point, the Angel Investors are those individual investors who have the surplus amount of money that they want to invest in a good startup business. Although the amount is relatively lesser than the venture capitalists, Angel investors are easy to deal with, and most importantly, they believe in your idea instead of looking for good returns.
In case you have a startup idea that does not require much capital, and a smaller amount can do for you, then we will suggest you look for the Angel investors instead of trying your hands on the Venture Capitalists.
Venture Capitalists: Do we really need them?
Venture capitalists have a better budget and are those investors who are looking to make more profit by associating with the startups that look promising and have better potential than the others. They mainly invest the money for good returns as they are looking for a safer and more reliable way to invest money.
So, these were the two categories of investors that you can opt for backing up your startup. Choose wisely and target the investors that can help you go through the risks of the market.
Top three ways to attract the investors towards your On-Demand Startup Idea
Now once you have chosen the right type of investor, the next step is to attract them to your startup. Regardless of the type of investor you are choosing for your startup, the procedure involved in attracting them towards the business is almost identical, and you should make them believe that your plan has the potential and you can earn good profit for them.
Here are the three points that will help you attract the most brilliant investors to your startup and get proper funding for establishing your business.
1. Know your potential well
The first and the most important thing that will help you attract investors to your startup is to know your potential. The investor first looks at how much you know about how to make and grow on-demand delivery app, and how passionate you are about the plan. They invest in your potential and knowledge and, if you are not sure about your planning and future, then no investor will invest his money in your on-demand startup idea. So, make sure that you thoroughly know your potential and plans for the future.
2. Have a realistic approach
Do not try to fool investors by telling them lies. The investors know the difference between the actual potential of a person and business and the unrealistic goals that cannot be achieved in any way. So, instead of fooling the investors by proposing them false goals, try to be realistic to get the funds as early as possible. You PPT should reflect the same and using graphs etc for your PPT will add value to the approach.
3. Learn from your mistakes and failure
If you are planning to get the funds in the middle of startup establishment, then the first thing that investors look for is how dedicated you are towards your business and how responsible you are towards your mistakes and also how eager you actually are to establish yourself in the market. So, try to learn from your mistakes and let the investors know how much you are dedicated to your work.
In all, if you have plans to be a startup owner in the near future and are looking to enter the market with a good backup, then it is essential that you have the plans to attract investors to the business. So, keep the above-listed points in mind, attract the potential investors to your business, and improve your presence in the market.