Lets talk about investment for tech startups

[ThatDevAaron]

So. I'm one of the lucky few, who managed to launch a startup with extremely minimal funding, simply due to the fact that I have experience in the industry, and don't need to outsource tasks, and am not over paying for simple overheads. For most, a startup in tech, means needing, in most cases, a backing of at least 5 figures to just get their company/business operational.

There aren't many resources you can trust online for securing funding, and even for companies like ours, that are ready for expansion, have a profitable business etc - The vast majority of resources you can find on google etc, are more about taking money from you, as opposed to getting money to you.

So; let me sum up:

Where are some good places to seek investors (specifically for tech?)?
What are some good things to have before seeking an investor?

I think it would be beneficial if replies are oriented toward different use-cases:
Businesses looking for small investment (<=5 fig)
Businesses looking for larger investment (>=6 fig)

 

[fisicx]

What do you mean by tech?

What’s wrong with just applying for a loan?

 

[ThatDevAaron]

What do you mean by tech?

What’s wrong with just applying for a loan?

1. Tech as in IT - idk ik its a bit generic

2. investors provide more than $ sometimes, can provide access into markets etc - loans can be iffy

 

[fisicx]

If that’s your definition of tech my start up costs were almost zero. Unless you count buying a new laptop.

Why are loans iffy?

 

[Ozzy]

I think the disconnect here is that @fisicx has identified 'investment' as someone just needing some money to fund their startup, but only ever so rarely do investors invest just for the transaction of putting in money and those seeking investment just for the money are often not a suitable 'investment'.

People seeking investment, the right investment ready people, are not just looking for money. They want and need the baggage that comes with it, the oversight and te strategic direction and sometimes the mentoring. This often can come by way of a board of directors, appointed by the investors and the company founder is accountable to that board. Providing regular performance reports, and having many key decisions contractually tied to board approval. Certain levels of purchasing or sales require board approval, and even some levels of recruitment are reserved for board approval.
These are all great things that can guide a business to sustainable growth, but they can also make the business founder feel constrained, as if their hands are tied from being able to just 'get on with it'. Hence, investment isn't for everyone.

For those who this isn't right for, yep a loan might just be the better option.

 

[JEREMY HAWKE]

The challenge with investing in Tec is that the investor needs to understand the business and the investors that I have met are bigger dinosaurs than me so I understand why @ThatDevAaron views it as such a niche risk

 

[Porky]

Sorry but in this climate it will be easier for him to find lord lucan than it will to find an investor in an IT business.

Needs to look at a) self funding b) loans c) friends/family d) crowd funding maybe?

Unless he has something really ground breaking it will be tough. Far too many mouths to feed at the moment In unatractive market conditions.

 

[ThatDevAaron]

Sorry but in this climate it will be easier for him to find lord lucan than it will to find an investor in an IT business.

Needs to look at a) self funding b) loans c) friends/family d) crowd funding maybe?

Unless he has something really ground breaking it will be tough. Far too many mouths to feed at the moment In unatractive market conditions.

You're right, which is primarily the reason for this thread; as I haven't found any resources regarding this topic.

 

[Mark T Jones]

I suspect i raised similar complaints when I first started in business 35 years ago.

Because the blunt response that's stick with me was 'it is now as it ever was'.

And guess what - it is now as it ever was.

There are plenty of investors - and many times more people chasing their cash - which why you need something compelling to even get noticed. And far more compelling to get funded.

By compelling, I mean not the idea, but the business itself and your ability to run and grow it on their behalf.

Are you ready?

As @Ozzy says, investors want involvement and returns.

 

[ThatDevAaron]

I suspect i raised similar complaints when I first started in business 35 years ago.

Because the blunt response that's stick with me was 'it is now as it ever was'.

And guess what - it is now as it ever was.

There are plenty of investors - and many times more people chasing their cash - which why you need something compelling to even get noticed. And far more compelling to get funded.

By compelling, I mean not the idea, but the business itself and your ability to run and grow it on their behalf.

Are you ready?

As @Ozzy says, investors want involvement and returns.

Do a lot of tech/IT investors want involvement?

 

[fisicx]

Do a lot of tech/IT investors want involvement

No. They want the returns tech can give them. Look at the billions being invested in AI as a current example.

However, some may invest in tech if it compliments their business and become involved in the tech. For example, solar panels and electricity generation.

 

[Mark T Jones]

Do a lot of tech/IT investors want involvement?

Pretty much all investors want some involvement, ranging from periodic reviews to a seat and an office

Ask yourself this question - what are you offering that will excite investors?

Differentiate yourself from the thousands of others chasing money?

 

[Ozzy]

It depends on the investor. If the investor is a person, yes they generally do want involvement, but if the investor is a pension fund then they will usually appoint a representative onto the board of directors who's job it is to keep an eye on their investment.
So generally speaking, yes they do always have some involvement to varying degrees.