Creating a startup and own business is a time-consuming and labour-intensive process. After developing a viable business plan, it may turn out that there is simply not enough money to implement the project. has been figuring out how to find an investor for a startup, what instruments exist for this, and why it is not enough to just come to an investor with an idea.
How to find an investor for a startup in Ukraine
The basic rule, regardless of the search and investment attraction instrument, is to thoroughly prepare an offer for an investor or a fund. It is necessary to prepare not only the pitch, but the business as well. If you present a working business, it will surely attract investment.
Funds and private investors are very interested in specifics. They do not need to know how wonderful a startup will be in many years, it is important for them to know how the project is working now, and what its real figures are.
The second equally important emphasis is communication. It is not necessary to agree with every decision or proposal of the investor, but it is necessary to pay attention to why they have suggested it. If you develop communication with the investor, the chances of getting financing increase.
There are many ways to find a startup investor. We'll cover the main ones.
Approach a venture or investment fund
There are venture funds in Ukraine that one can approach. For example, TA Ventures, U. Venture, Fison, Genesis Investments, etc. Venture funds invest in different startups according to different criteria. You can choose a fund that the current startup will match the most.
Venture funds, in addition to supporting investment rounds, can help a startup find clients and provide the necessary expertise. But it is necessary to thoroughly prepare for a meeting with representatives of a venture fund, because they do not invest in risky projects.
At the meeting, it is necessary to present the business from all sides: to tell how the processes are going, what technology this startup has and how it differs from the rest, how a startup deals with distribution channels, what is the rate of growth, to analyze partners and competitors.
Find a business angel
Finding a business angel is not easy. But even if a startup is turned down, business angels can explain their decision and even give advice. To find a business angel for a startup, one needs to search and analyze relevant platforms, for example UAngel.
Business angels not only give money, but also help a startup at different stages of its development. Just like with a venture capital fund, in order to raise funds for a startup, it is necessary to thoroughly prepare its executive summary. It is equally important to participate in events related to startups and investments—this way one can get not only useful knowledge, but also important acquaintances.
If the search for a business angel isn't successful, there are resources for crowdfunding. In Ukraine, it is quite possible to find investors through crowdfunding. On such resources as Spilnokosht, Kickstarter, Booomerang, Startup.network, etc., money can be borrowed, exchanged for part of future income, or simply obtained for nothing.
Both investments and the necessary knowledge for a startup development can be obtained through accelerators. This is an educational program for a startup, in which experts help to find useful contacts, improve the product in marketing and sales.
There are accelerators in Ukraine as well. For example, in March 2021, the Head of the IT company Digis Nikita Nagatkin and the former head of Eurosport Jean-Thierry Augustine created the business accelerator Richelieu V. The accelerator offers mentoring: strategy, business development and leadership; providing access to a network of contacts and quality advice on business matters, etc.
Investments in a startup can be obtained on a competitive basis. In Ukraine, for this there is the Ukrainian Startup Fund—a state organization that allocates money as grants, and not for a share in a company. Projects are evaluated according to several criteria: team, market, technology, strategy, idea (at the pre-seed stage), product (at the seed stage). A startup can receive a grant from $25,000 to $50,000, depending on the stage.