Venture capitalists invested a total of $29.4 billion into nearly 4,000 startups in 2013, according to the National Venture Capital Association. Meanwhile angel investors continue to account for a growing number of business deals, with the number of angel investor groups nearly doubling in the last 10 years.
Some investors simply want to help out an ambitious entrepreneur who reminds them of themselves when they were starting out. Most want to make money on their investments. Regardless of your motives, here are four tips on how to find startup companies that are seeking capital.
LinkedIn Is Your Friend
Most people use LinkedIn to find employment, find employees or build their network when they are looking to leave their current positions. The social network is also an excellent resource for investors looking for the right opportunities.
If you haven’t already, create a LinkedIn account and join various groups that connect investors to startups. Venture Capital Group is the LinkedIn page for the website VentureDeal.com. It specializes in connecting its database of over 18,000 tech startups with the resources they need to take the next step forward. Angel Investor Group on LinkedIn has over 30,000 members and specializes in connecting investors to startups seeking seed funding. Search the LinkedIn group directory for more options.
Gaurav Jain, principal of Founder Collective, wrote an article for Venture Beat last year calling AngelList “the Android of Venture Capital“. The comparison was made because, as Jain put it, AngelList will force most venture capital firms to adapt or go out of business because of its interface and platform.
AngelList, unlike most venture capital firms, is free to join and provides an open marketplace for investors and entrepreneurs to connect. You can browse startups and learn about their philosophies, management teams and financial goals. You can also list yourself as an investor so entrepreneurs can pitch their ideas directly to you.
Attend Networking Events
There is no better way to get your name out there than by shaking hands and mingling at networking events. EventBrite is an excellent resource to find networking events in your area. The website will automatically pull up local events based on your IP address, and you can further refine the search by date, Zip code and type. Twtvite is another option that helps you find events that are trending on Twitter. Of course Facebook and Meetup.com are effective for finding local networking events.
The one constant all investors must keep in mind is what their role will be once the transaction is made. Investors who want active roles in business operations should make certain that is also the philosophy of the management team. Those who want a sit-back-and-watch role should also make that known upfront.