As a wannabe entrepreneur, finding investment is the way to grow your business. Businesses don’t appear out of thin air: they take hard work, but they also take the sort of capital that only investors have. This is true not just for businesses such as manufacturing or industry, but also for industries that don’t have physical overheads.
Tech is one such sector: with coders, developers and more all commanding high salaries, often the only way to build an app or develop a platform is to secure some investment to pay for it. But the world of investment is not always as tech-friendly as it might seem on the surface. Some investors are wary of technology, perhaps because they don’t fully understand it – or they might even think it’s an investment bubble.
As a tech entrepreneur, it’s well worth thinking about the best ways to weed out those investors who aren’t tech-friendly – and working out which ones are.
Use tech to find them
Perhaps the most obvious way to assess whether an investor is friendly to technology is to use technology to actually find them! When it comes to finding investors, there are plenty of tech-based platforms that connect entrepreneurs and those with capital. A website such as AngelList is a prime example: if an investor is on this platform, it’s safe to at least assume that they have a positive outlook towards technology.
While it may not indicate for certain that they have a strong preference to invest in tech firms, it’s a good starting point. The quality of their firm’s website is also worth investigating because firms that have well-developed and properly coded websites are likely to understand the value of technology, and hence to appreciate that it can have value as an investment destination.
Look at their current portfolios
Once you’ve got a basic idea as to whether your preferred investors might have a passion for technology, there’s no better way to work out what sort of start-ups they might be interested in supporting than by looking at their current portfolios. This information might not be entirely publicly available, although many investors do make their portfolios public. Tech investors, including Bill Malloy, are known for publicly advertising the fact that they work with technology companies, so it’s certainly worth trying.
If they don’t appear to offer investment to technology companies, it may be worth a quick phone call to see. However, given the “hot button” nature of tech start-ups, it’s almost always advantageous for a VC firm or similar to advertise themselves as tech-friendly – so if they’re choosing not to do that, it could be a cause for concern.
Use other channels
If you’re trying to find an investor through the established channels, you may not be having much luck. Those firms which are tech-friendly are often over-subscribed because of the sector’s current popularity, and the risk that you’ll spend precious time applying to an investor whose public portfolio is ambiguous is high. In short, it’s easy to end up feeling like you may have wasted your time.
Taking a different approach to finding investment is a smart idea if you’re struggling to do so through the normal channels. Heading down to networking events and building relationships is one way. And if you already know plenty of people through friends, relatives, and other connections, the chances are that somewhere in your wider network there’s someone with enough interest in tech to be prepared to consider investing – and your closest loved ones may be able to help you identify them.
While it seems like a great position to be in to find yourself carrying armfuls of cash from a friend or family member, it’s not necessarily the case. It could jeopardize your personal relationships, especially if the business was to go wrong. Receiving funding from a VC firm might be harder, but it is often the only way of ensuring that the transaction is as professional and depersonalized as possible. As an entrepreneur, the risks are there for you to judge, and it’s up to you to choose your path and jump into the unknown.
Finding the right person to invest in your technology start-up was never going to be easy – especially given that tech is such a popular industry and that so many people are in your position. But by being savvy, using tech tools and even thinking about other channels through which you could reach people, there’ll always be a way to secure the investment you need.