How Important Is Investment For Your Startup (And How Can You Get It)?

It’s natural to feel on top of the world when you first find success with your startup. Unfortunately, despite those positive beginnings, the reality remains that around 60% of UK startups fail within their first three years.

Making sure you don’t become one of those numbers means spending those three years on sustaining your success. There are, of course, countless ways to do this, including simply perfecting your products and narrowing down on your target market. Experts also advise that investment is key for the long-term sustainability of any new enterprise. 

In this article, we’ll consider just how important investment is for your startup, and how you can secure it during those formative first years. 

Photo by Docusign on Unsplash

Understanding the Role of Startup Investment

Startup investment involves securing business funding via investors who will typically require a percentage share of your future sales. This is one of the easiest ways to ensure your business has enough money to succeed before profits properly start rolling and will allow you to –

• Develop your ideas: Early startup success is dependent on your ability to funnel your initial ideas into viable, desirable products. Unfortunately, even if you can afford to do this off the bat, it’ll be difficult to take your products to the next level or explore the full possibilities of those ideas, without sizable funding that leaves room for experimentation and advancement. 
• Grow and scale: Growth doesn’t come cheaply, and your ability to scale your company is dependent on the money necessary to grow your team or manufacturing capabilities. To some extent, early profits will help but, with your output also limited by small processes, investment is key to scaling per consumer needs. Hence why the startup companies with the best funding typically have the best reputations. 
• Getting the word out: As a small business, even your best efforts will falter if people don’t know your name. Investors provide you with additional money to ensure priorities like a marketing budget which means, as well as top products, you have the funds necessary to reach the right people. 

How to Secure Startup Investment

Photo by Yan Krukau

Securing startup investment isn’t always easy, but there are steps you can take to improve your chances, such as – 

# 1 – Choose the Right Investment Type

Different types of investors, including angel investors and venture capitalists, have different priorities and are best for different purposes. Take the time to understand their differences, and choose the best option for your current business plan. 

# 2 – Nestle into Your Network

Building industry connections is key to connecting with potential investors, and should include appearances at industry-specific networking events like conferences or local launches. 

# 3 – Win Them With Your Business Plan

Your business plan should be a foolproof testament to the potential of your products moving forward, with clear guidance on why you require investment, and how you would use that money to ensure returns. 

Is investment important for your startup? Most likely, so make sure you secure it using these pointers.